Unfinished business: 30 years on, how relevant is the Latham report today?

Though the Beatles’ Come Together preceded the Latham report, Constructing the Team, by a quarter of a century, it could've been written for it.

This July marks 30 years since the report’s publication.

And just as the Beatles are still relevant in 2024, so too is the report that was pivotal in modernising the UK construction industry.

What is the Latham report?

In an industry full of reports, we forget how far the construction industry has come in the last 30 years.

At the time the government and industry commissioned Sir Michael Latham, the industry was not how it is now.

The industry was divided and contracts pitted parties against one another. Risks were unequally shared and poor design was the norm.

The Specialist Engineering Contractors Group and the ICE were among the organisations calling for change.

What changes did the report bring?

Latham set it out clearly. Collaboration and cutting out disputes should be at the heart of a new way of working.

Arguably, the Latham Report’s biggest achievement was new legislation.

The Housing Grants, Construction and Regeneration Act 1996 introduced adjudication, allowing independent parties to resolve construction disputes.

But other recommendations stood out.

One third of government projects should use the New Engineering Contract (NEC) by 1998

Latham gave this recommendation a big push, and it received strong uptake.

NEC is now one of the most widely used forms of contract in the UK, with the Cabinet Office endorsing its use for public sector procurement.

The contract is also seeing increasing use overseas.

Government project sponsors should have sufficient expertise to fill their roles

The Major Projects Leadership Academy (MPLA) was developed to equip senior leaders to effectively lead complex projects.

Created in 2011, it was the first leadership programme of its type in the world.

Since its creation, over 700 participants have graduated from over 47 departments.

The government should commit itself to being a best practice client

It’s debatable whether this recommendation has been achieved.

However, important agencies such as the Infrastructure and Projects Authority and the National Infrastructure Commission can trace their roots to Latham’s report.

And new delivery models such as Project 13 and the Construction Playbook are seeing increasing support.

Adjudication should be the go-to method to solve disputes

Adjudication is more widely used, which means more claims being resolved before reaching court.

The Technology and Construction Court does note a slow rise in the number of court claims over the past 10 years, however – with a recent peak in 2020-21, coinciding with the Covid-19 pandemic.

Industry views

To get a wider perspective, I spoke to industry figures who’ve witnessed the report’s impact firsthand.

Phillip Ward was director of the Construction Sponsorship Directorate in the Department of Environment (DoE), who sponsored the report.

“Latham recognised that teamworking was key to mindset thinking,” Ward said. “Culturally, the report was significant.”

As one of the report’s original contributors, he emphasised the importance of ministerial support.

“Without Environment Secretary Jon Gummer, the report would not have happened.”

De-politicising infrastructure projects

Thinking about what still needs to change, Ward observed:

“It’s crucial to engage permanent secretaries and those who will outlast short-term political cycles.

“Making project objectives and benefits part of their role will help to de-politicise infrastructure projects.”

The role of government as client

The Latham report laid the groundwork for the modern construction industry. Many aspects we now take for granted.

Kate Kenny, senior vice president at Jacobs, said: “There’s a lot that’s still highly relevant, including the government’s role as client.

“The start-stop nature of decision-making around major infrastructure projects in the UK adds significant time and cost.

“Major projects typically take 10 to 20 years. This timeframe will likely span multiple governments.

“It’s vital that major projects have cross-party support so they can proceed unhindered during changes in government.

“Governments like Sweden and Norway have infrastructure pipelines with cross-party support and ring-fenced budgets. This ensures continuous delivery across parliamentary cycles.”

The industry is moving in the right direction – but slowly

“Much remains very relevant,” agreed Boston Consulting Group partner Tim Chapman.

“The ethos of ‘implementation begins with clients’, the client’s role in promoting excellence in design, evaluating tenders on quality as well as price - the list goes on.

“It’s clear the industry now is more mature and is moving in the right direction. It’s just painful how slowly it's moved.

“And we face entirely new challenges. We need another review that offers the same clarity and direction as Latham.”

So, what still needs to change?

We need to improve our track record on major projects and programmes.

Lowest-cost culture is still too common in procurement. There’s a lack of true partnering, risk- and data-sharing.

In productivity terms, the construction industry has remained consistently below the UK average over the past 30 years.

Perhaps it’s time to finish what Latham started?

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