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Mr. Batiste: On a point of order, Madam Deputy Speaker. I sought to persuade the House of the need for a Division on my Bill. I believe that I shouted "Aye" to the limit of my voice.
Madam Deputy Speaker (Dame Janet Fookes): The Chair has to make a judgment as to the overwhelming preponderance of the view of the House. There was no need for a Division.
Mr. Paul Flynn (Newport, West): On a point of order, Madam Deputy Speaker. The Register of Members' Interests has been published today. I have perused it and noted that many hon. Members have registered remunerated interests without providing the detail of how much money they are being paid. Does this not frustrate the decision of the House that any such payments made shall be detailed in the Register?
Madam Deputy Speaker: Any views on the matter must be referred directly to the Commissioner.
Mr. Nigel Waterson (Eastbourne): On a point of order, Madam Deputy Speaker. I understand that the hon. Member for Leicester, East (Mr. Vaz) is to wind up the debate on the Housing Grants, Construction and Regeneration Bill for the Opposition. I see that in the Register of Members' Interests, which was published today, the hon. Member has--quite properly--declared a fee received from chartered surveyors and a research assistant provided by the Building Employers Confederation. May we have your guidance, Madam Deputy Speaker, as to the hon. Member's participation in the debate after making those declarations of interest?
Madam Deputy Speaker: It is quite improper for the Chair to anticipate in that way.
Orders of the Day
Housing Grants, Construction and Regeneration Bill [Lords]
Order for Second Reading read.
5.5 pm
The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones): I beg to move, That the Bill be now read a Second time.
The Bill underlines the Government's commitment to the construction industry, and I hope that it will be widely welcomed. For the assistance of hon. Members, I shall list the main purposes of the Bill. First, the Bill reinforces the moves of the construction industry to make itself more competitive in an increasingly international market and to deal with abuses of payment procedure. Secondly, it gives more flexibility to local authorities in the payment of grants for private sector renewal.
Thirdly, the Bill reforms the Architects Registration Council to ensure a greater degree of independence and more manageable arrangements. Fourthly, it builds on the success of the single regeneration budget and it brings together the grant-making powers for the budget. Finally, it introduces more flexibility into the home energy efficiency scheme to recognise the pace of technological change in the insulation industry. There are, of course, many other provisions.
The Bill has been considered in another place and it comes to the House much improved as a result of their Lordships' deliberations.
Mr. Andrew Rowe (Mid-Kent):
Am I mistaken in believing that the Bill says nothing about extending the building regulations to ensure that, from the beginning, the houses that are built are capable of housing people from every generation and people with varying degrees of disability? If so, is there scope to introduce such a measure into the Bill?
Mr. Jones:
My hon. Friend is correct: that is not covered by the Bill. However, it has been raised in debates in the other place, and I assume that that is why he intervened. We have had an enormous response to our consultation about part M of the building regulations, which we are now digesting and analysing. We hope to produce revised part M regulations in due course.
I shall refer to the proposals in the Bill that affect the construction industry. The Bill is a little unusual in that this provision has been introduced in support of initiatives within the construction industry, as opposed to a specific follow-through of the Government's policy. Therefore, it has been a somewhat complex matter because we have had to negotiate with a large number of trade federations and interest groups to produce what I hope hon. Members will regard as a consensus within the industry. As such, the legislation is only the tip of the iceberg and much else is needed in the construction industry. I shall report on any progress in this regard to the House.
I pay tribute to the officials in my Department who have carried much of the load of the lengthy meetings that have taken place with the various interest groups in the construction industry. Although there is a consensus,
it has moved around a little during the course of the deliberations and it has thrown up an enormous amount of extra work.
Something must be done about the competitiveness of the construction industry, which is a problem. In a report commissioned jointly by the Government and the construction industry, Sir Michael Latham, a former Member of the House, reported in 1994 that the productivity of construction in the UK was falling badly behind our overseas competitors. He found that costs were far too high and invited the industry to set itself a target of reducing those costs by 30 per cent. by 2000.
Sir Michael's conclusion may have given many in the industry a jolt, but it was partly based around frightening evidence from the industry's clients. For example, Lynton plc found that the cost of producing a typical American office building in North Carolina to be 32 per cent. lower than a similar building in Heathrow. Stanhope reported that during the period 1985 to 1991 it regularly achieved construction savings of around 30 per cent. compared with industry norms. Anyone who has heard Sir John Egan of the British Airports Authority making speeches on that subject will know that he regards the 30 per cent. target as modest. He has reported that, in most cases, things are 55 per cent. cheaper in the United States.
The Latham report gave no illusions that the solution would be simple. McDonald's Restaurants Ltd. provided at least one example of a cost-saving strategy that was multi-faceted. The company had reduced the cost and time of construction in the UK over the preceding five years by 60 per cent. and on-site construction times from 115 to 15 days by using modular techniques and treating production as an engineering exercise. It was looking for further improvements including standardisation of components, and it agreed on a yearly programme with producers to build up familiarity, team work and performance.
Given that background and the improvements registered by some clients, the House may wonder what legislation has to offer. It is not a process in which legislation offers everything. We cannot require the industry to innovate and use new technologies, although the Government can and do provide assistance to research; nor can we require the industry to use new forms of working such as partnering and benchmarking, although we are sponsoring initiatives aimed at just that as part of our wider competitiveness agenda. We have an obvious interest, and not just because of our commitment to the United Kingdom plc, as the industry's biggest customer. We have therefore been involved in much of the process to improve competitiveness and I would like to report on progress.
One of the first recommendations of the Latham review to be implemented, and one of the most important, is the setting up of the Construction Industry Board. It is comprised of representatives of the four main umbrella organisations in the construction industry representing the consultants and professionals, such as architects; the major contractors and master builders; the specialist subcontractors; and the material producers and suppliers. They have been joined on the CIB by representatives of the clients and of Government. It is the first time that the industry has had an effective co-ordinating body and the ability to speak with one voice.
The CIB mechanism has spawned a number of working groups that have been created to deal with an aspect of improving the construction industry's productivity and competitiveness. Nevertheless, the Government have been persuaded by the construction industry that legislation is required to improve the contractual framework in which it operates. Construction is unusual in the way in which it is organised, because large projects in particular draw upon a wide range of construction skills that tend to be provide by independent specialists. Hence a client may retain a major contractor to organise a project for him, but that contractor will not necessarily use his own staff. Skills and labour may be bought in from subcontractors, each operating under a separate contract. On a large project, the final result will be a lattice of certainly tens, and possibly hundreds of contracts involving the clients, main contractors, designers, managers and specialist subcontractors.
I will come on, in a moment, to the way in which this Bill will tackle the problems that that can cause, but it is important that I first set the provisions in context. They complement a far wider process of productivity improvement. A process that is being co-ordinated by a central forum, the Construction Industry Board.
The board's main avenue of progress is via the 12 working groups. Those have a mixed membership that includes representation from the main contractors, specialist contractors, consultants and Government. In addition, there is representation from that important group--the clients. That wide cross-representation will help to ensure that the outputs from the working groups, whether they are reports, guidance notes, or codes of practice, will have the support of all sections of the industry as well as its clients.
I believe that it is true to say that the extent of that co-operation is unique in the history of the UK construction industry, and it is vital to ensure that the best possible use is made of that valuable resource.
Each of the working groups is making an important contribution to the process of change. I regret that I can only sketch out that contribution in the time available to me.
Working Group one has been producing a guide for clients on better briefing. It has reviewed the guidance already available, and used that to draw up a guide for the use of experienced and inexperienced clients, in the public and private sectors. Many of the problems encountered on construction sites can be laid at the door of inadequate or poor briefing by clients of their designers and constructors. The objective of the guide is to save clients time, trouble and money by helping them to determine the most appropriate construction project for their needs, and at the same time to foresee problems and avoid them. The guide is now in the final stages of preparation and is due to be considered by the board in the near future.
Working group two is producing a code of practice which is intended to cover the full procurement process. The objective is to enable clients to obtain their desired end product, get value for money, and guide industry practitioners on their roles. The code is intended to be an authoritative statement of best practice, and easily accessible to a wide range of clients and industry
practitioners. The work is being co-ordinated with that of working group one. The code is now in its final stages and is due to be considered by the board shortly.
Working group three is also working on a code of practice, which aims to codify the practice of short tender lists and selection on the basis of both quality and price, and ensure that subcontracts meet the Latham principles. It aims to rule out Dutch auctioning, as well as securing co-operative working between subcontractors. The work is being co-ordinated with that of working group two. The final report is due in the near future.
Working group four has a dual task. As well as producing a mechanism to enable quality as well as price to be assessed when engaging professional consultants, it has been studying the issues relating to the creation of a single register of consultants seeking public sector work, and the appropriate requirements for entry on to the register. In tackling the first part of its work, the working group took full account of the various mechanisms that have already been produced in that respect. The guidance will enable full scope to be given to the qualitative aspects of consultants' tenders for commissions, thus enabling proper judgment to be given to value for money. The guidance has been endorsed by the National Audit Office as well as by the Audit Commission and the Chartered Institute of Public Finance and Accountancy. It has now been approved by the board and is due to be published shortly.
On the second part of its remit, the working group's report has been accepted by the board, and handed over to the Department of the Environment, which has let a contract for the redevelopment of that and the contractors management information system.
Working group five has also had a dual remit. As well as developing a standard pre-qualification form for public sector work, it has been considering the issues relating to the creation of a single register of contractors seeking public sector work, based on the existing contractors management information system. The working group's report has been approved by the board; as mentioned earlier, DOE has let a contract for the redevelopment of the contractors management information system.
Moving away from the production of codes and guidance notes, working group six was tasked with preparing a report identifying action for Government and for the industry on construction training for craft workers and operatives. The working group has produced a summary report with recommendations, which take account of the actions of the Construction Industry Training Board in implementing its new entrant training strategy. The working group also looked at the activities of non-CITB training organisations, the training of supervisors and technicians, the training needs of specialist trades, the delivery of training and its funding. That report is due to be considered by the board shortly.
Working group 7 is considering the image of the industry. Much of the criticism of the industry by outsiders is based on the industry's unfavourable image. Often that perception is based on a misunderstanding of the way that the industry operates or on misinformation or a general prejudice against what is perceived to be a dirty, noisy industry, which operates in unpleasant conditions. That unfavourable image is accepted as a significant problem and lies at the root of many of the problems that the industry has in dealing with the outside world.
The working group has produced several valuable ideas which have been accepted by the board. Plans are now in train to set up a national version of a considerate contractors' scheme, similar to that operated successfully by some local authorities. In addition, a marketing plan adopted by the board should lead to some exciting initiatives, which should go some way to counter the industry's poor image.
One of the outcomes of the industry's poor image is difficulty in recruiting women and ethnic minorities. The perception is that of an industry dominated by macho white men. Although that picture is not representative of the industry as a whole, it is not far enough from the truth to enable the industry to be counted as a true equal opportunities employer. Working group 7 was set up to tackle that problem, starting with equal opportunities for women.
The working group has gone to immense trouble to investigate the truth, examining all sectors of the industry to find out what the position is and what improvements could practically be made. Its aims are to encourage the development of attitudes, practices and physical environments that do not disadvantage women, and to encourage more women to enter the industry at all levels, trades and professions and to progress in it.
The working group's report includes an equal opportunities code of practice and an implementation plan for use at company level. The report has been adopted by the board, which aims to publish it soon.
Working group 9 considered the education of construction professionals. There have been several reports on that subject in recent years. The working group's task was to consider how best to achieve implementation of those recommendations that have received general industry support. The working group's solution was to produce a list of what it called "learning outcomes"--in other words, attributes that those graduating in construction disciplines should have acquired, as well as attributes that are appropriate for those undertaking continuing professional development during their careers. Those learning outcomes should better equip construction professionals to exercise management and business skills as well as professional judgment and awareness. The report has been adopted by the board and is in the process of being implemented.
A great deal of very good work is going on in many academic institutions, encouraging cross-disciplinary teaching in the construction industry. Not long ago, I visited the University of Central England in Birmingham, in the Perry Barr area, and was greatly impressed by what it is doing. I am sure that that is one of the ways to approach future professional education.
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