Lance Gudger, construction director at O’Brien Contractors, discusses the benefits that could come from improved co-operation in the construction industry
Levelling up the UK’s construction and engineering sectors demands top-level attention. To meet the targets outlined in the government’s 10-year infrastructure strategy, the Competition and Markets Authority has launched an independent study into the efficiency of road and rail infrastructure, with the intention of improving the relationship between the public sector and contractors.
Whilst in theory this sounds like a dream come true – finally, somebody is paying attention to the problems the industry is facing – the likelihood of any major change happening soon will remain slim, unless this is tackled from the top.
Where do the problems lie?
As is so often the case, the majority of issues come down to funding. An under-funded planning sector means an under-staffed planning sector, which in turn creates a ripple effect that trickles into every crevice of the industry. Whether it’s clients delivering tender packages that realistically reflect the intricacies of the project, or making sure there is enough people power on site to ensure works are understood and delivered correctly, most issues the sector faces could be solved via funding.
This is a problem that hits contractors at all stages of a project. At the moment, public sector tenders are infamously weighty, and whilst this is to be expected, time-intensive red tape and administrative hurdles are setting contracts back by months. In addition, tender enquiries can often be generic and lack the specific information needed to indicate the level of risk – information which helps create a tailored and realistic price and sets expectations for the job ahead. To counteract this and make sure all areas of risk are accounted for, bids can often end up being higher than necessary, making it harder to stay competitive. The lengthy tender and planning process isn’t to be difficult or to make contractors work even harder, but is instead down to a lack of staffing in the drastically overworked “pre-start” sector.
Complicated processes for civil engineers and planners
Understanding planning conditions and the associated permits and agreements that must be completed before and during the works demands significant time and resources. Take Section 278 of the Highways Act 1980 (S278): a mandatory contract which is required between a contractor and client to enable works on a public highway to commence. Not forgetting the three months that must elapse after its execution before occupying the road space. Despite being a critical piece of legislation, S278s can be notoriously slow to deliver and, in some cases, take months or even years to secure.
Planning conditions can often contain hundreds of clauses, all of which need to be compiled before planning is agreed; the time and financial commitment involved in meeting planning criteria and discharging conditions is a significant risk given the lack of certainty that comes with it.
Time is one of business’s biggest expenses and is, unfortunately, something that can’t be earned back. However, this becomes even more important when delivering a project that involves multiple local authorities. If delivering large national infrastructure, a topic the CMA’s study directly speaks to, it is not uncommon for works to sit across multiple counties where authority guidelines can differ. Naturally, working with multiple local/highway authorities on one contract brings additional complications. Differing timescales and design standards can significantly slow down a project, and can create a great deal of waste when materials don’t meet the same criteria throughout – an issue this industry is actively trying to counteract. If the government wants infrastructure to be delivered in a streamlined and sustainable manner, standardisation, or at least some level of it, is required.
Understanding all of this can make or break a contract win. An experienced contractor will know the impact that multiple slow-moving parts can have on the timing and commerciality of a proposed scheme. Still, if the sector is to move forward in tandem with local authorities, something has got to give.
One strategy that the sector should further embrace is Early Contractor Involvement (ECI). Entering an ECI contract can help to ensure that as many critical issues as possible are resolved in advance, eliminating the opportunity for added risk and additional costs. Whilst this strategy is already being implemented to some extent, this is just a temporary bandage for the wound that is under-resourced and under-funded local authorities.
So, where next?
With the CMA report currently underway and not due for publication until 2026, it will still be a long time before any change is felt. But delivering the study is a good first step. It’s clear that both planning authorities and the construction industry need to improve their working relationship – not only for their own sake, but to the benefit of the country. If we are to see a change in the way infrastructure is delivered, the answer really lies in funding.
Greater funding will equal greater resourcing, which together will create a dichotomy where tenders are detailed and strategic, agreements and permits can be approved quickly to create a more efficient working environment, local authorities can collaborate in a coherent manner, and, finally, civil engineers and planners can work hand in hand.
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