Ray O’Rourke KBE is founder and CEO of Laing O’Rourke. This is a sponsored post by Laing O’Rourke.
Times of great challenge can lead to great change. As ever-larger parts of our economy reopen and we focus as a nation on a return to economic growth, now is a moment to seize the opportunity for transformational change in how we do things.
A strong construction industry will be the foundation of our economic recovery, using highly-skilled workers to build the modern hospitals, schools, homes, offices and transport networks we need. The Government rightly enabled construction sites to stay open – with appropriate protections in place – throughout the lockdown and is now looking at how to bring new projects forward. For an industry that employs almost three million people and supports hundreds of thousands of UK companies this support has been essential.
Yet it won’t be enough on its own to get this vital sector back to full health, not least because we have yet to address a fundamental structural problem at the heart of how we build things in this country.
At the moment most construction in this country is still done in a way that the Victorians would recognise – by hand, brick by brick, out on site come rain or shine.
Unlike almost every other sector, construction has yet to update how it works and take full advantage of advances in technology. Now we need to change that.
In April, Laing O’Rourke completed work on several sections of The Grange University Hospital in Gwent, South Wales, allowing a large part of the hospital to open more than a year ahead of schedule.
This early delivery of critical bed-space was at the request of the Health Board, allowing them to have additional beds and wards available as part of their Covid-19 plans. A hospital build that was originally planned to take four years will be completed in two and a half, even factoring in a global pandemic and lockdown.
This has been made possible because the hospital was designed and built using what’s called Modern Methods of Construction (MMC) or what we at Laing O’Rourke pioneered through Design for Manufacture and Construction (DfMA). Both exteriors and interiors were built in sections at our specialist factory in Nottinghamshire and then precision assembled on site. As a result, it was already well ahead of schedule before the Covid-19 crisis, allowing us to hand over large parts early when asked.
Our MMC factory in Bassetlaw is Europe’s most automated precast concrete products facility and since it began production in 2009, it has helped build 240 UK projects ranging from schools, hospitals and rail and road bridges, to residential and commercial developments.
Using this high-tech approach means that 70 per cent of construction on a project now takes place offsite, leading to a huge 60 per cent increase in productivity and a 30 per cent reduction in build time. Importantly, it creates long-term, well-paid, high-skilled and inclusive jobs permanently located in communities across the UK. For much of our workforce, it means they work in the same location day-in, day-out, living at home with their families rather than having to spend months away from home wherever the work is.
It means that, despite many large construction projects still being concentrated in London and the South East, the jobs associated with those projects can be in communities across the Midlands and North of England, with a network of regional production facilities. As the Government seeks to level up investment, new projects in the North and Midlands could be delivered in record time.
Prior to Covid-19, this Government was rightly focused on investing in our dated and creaking infrastructure and our sector felt on the cusp of a phase of growth. We now need to ensure that this growth still happens and that it is the underpinning of a much overdue transformation of this industry.
The industry will have to make very substantial investment to achieve this change and to do so there must be a partnership with Government and public authorities. There are three priorities we see that could make a substantial difference.
First, the Government should – as is already being discussed – accelerate the start of those projects which it has already started to commission, getting money flowing into the industry and the supply chain at this crucial time.
Second, the Government and public authorities across the country should improve their own development pipelines – showing the industry the projects they are committed to long-term, persuading lenders that there is a viable pipeline to support their investment.
And finally, it is imperative that the Government now delivers on the commitment it made to prioritise offsite construction in its own procurement. In November 2017 the Government announced a presumption in favour of offsite building with the MoD, DfE, DHSC, DoJ and DfT committing to prioritise tenders with offsite construction components.
But in October 2019 it transpired that not a single health, transport or defence project with any offsite component had been procured in the first eight months of 2019, while the MoJ had awarded only one. DfE had done better with 22. But MHCLG – despite housebuilding being such a huge priority – was notably absent from the list of departments committed to offsite construction.
If the Government wants the country’s regeneration to be as efficient as possible this has to change and this year’s Comprehensive Spending Review provides an ideal opportunity for the Treasury and Number 10 to ensure that this commitment is made across every part of Government. Then put the onus on us to deliver.
At Laing O’Rourke we are excited about the part we can play with our industry in rebuilding this country’s economy and at the same time transform how we rebuild Britain. We look forward to partnering with the Government to do so.