To sustain the construction sector and deliver a growing infrastructure pipeline, the Scottish government and industry must address a range of challenges around delivery and operating models.
The Scottish Parliament’s Economy, Energy and Fair Work Committee is running an inquiry to assess the health of Scotland’s construction sector and to pinpoint where improvements to its performance could be made.
Drawing on a wide range of thinking from across its membership, ICE made a submission to help shape the Committee’s thinking.
The importance of the built environment to Scotland’s economy
Scotland’s construction sector employs over 186,000 people, contributes 6% of overall economic output and is a key enabler for growth in related industries. On top of this, planned investment in Scotland’s economic infrastructure is ambitious, with the Infrastructure Commission for Scotland having recently been appointed to advise on £7bn worth of projects.
To sustain the construction sector and deliver a growing infrastructure pipeline, the Scottish government and industry must address a range of challenges around delivery and operating models.
ICE’s submission to the Committee’s inquiry sets out the need to boost productivity levels in construction fuelled by improvements to procurement models and approaches to innovation.
The need for greater supply chain collaboration
Low levels of productivity in construction are unfortunately a longstanding and well-documented problem. Sometimes it’s hard to imagine anything else from a sector struggling with cripplingly low margins that has grown risk-averse as a result.
Yet there are targeted and gradual changes that can be made to existing sector practices that can begin to unpick this conundrum. That’s why ICE has been supporting the Project 13 initiative.
Project 13 seeks to move the sector away from the transactional and adversarial relationships that have become a common feature across the construction supply chain. The alternative is to create an environment more conducive to collaboration between project stakeholders, where risk and reward are shared equitably, based on and incentivised by performance.
This greater emphasis on collaborative behaviour also extends to procurement and helps to breakdown the theory that contracts must be awarded on the basis of lowest cost, rather than the ability of a bidder to deliver a wider range of socio-economic outcomes.
Unlocking the potential of new technologies and innovations
The potential of technology to help solve the construction sector’s productivity challenges is also huge. From robotics and machine learning, through to the greater use of offsite construction and manufacturing techniques, there are a range of opportunities that can drive improvements in performance and efficiency.
For example, the use of offsite technologies on the construction of Dumfries and Galloway Royal Infirmary enabled the delivery of the project six months ahead of schedule. This in turn resulted in major savings on labour costs and overheads.
Of course, these cost money, and for a sector that already finds itself financially constrained investing in new technologies and approaches is not easy. But the sector must exhaust all efforts to build in funding for developing and testing technologies that sit outside the scope of active projects, while there’s an ongoing role for government to incentivise this behaviour.
