House of Commons - Business and Enterprise

Select Committee on Business and Enterprise Written Evidence

Supplementary evidence from Construction Products Association

REVIEW OF EGAN TARGETS FOR 2007

KEY POINTS

"Accelerating Change"

— On a couple of targets insufficient attention was given to how we would measure what was being expected and it is therefore not easy to identify whether we have met the precise target, although we know that the industry has made progress in the right direction.

— In relation to the Client's Charter, the original Charter has been overtaken by events and in particular the development of the 2012 Construction Commitments. The focus of client leadership in the future will be the Client's Commitments that the Construction Client's Group is developing.

— The biggest disappointment is that we have not been able to make more progress on integration in relation to supply chains and project teams. Again it has proved difficult to measure exactly what is going on in the industry because what might be an integrated project for one part of the supply chain may not be integrated for another. Whilst most parts of the industry recognise that more integrated working is taking place and can demonstrate the benefits that arise from this, there is no hiding from the fact that we have not moved anything like as quickly as the Accelerating Change report intended or we would have liked. This is all the more frustrating given the clear message from the NAO report in 2005 that this kind of approach could save substantial sums of money in public procurement.

The Strategic Forum has developed an Action Plan to increase the adoption of integrated working—project teams and supply chains—and we can let you have more information about this if you wish. The upshot will be the announcement of a new programme to stimulate this with a new set of targets and all this will be announced on 11 June when the Strategy for Sustainable Construction is jointly launched by Shriti Vadera (and other Ministers) and Mike Davies as Chairman of the Strategic Forum.

— What we do need to recognise, however, is that there has been much progress in the industry over the last few years and we are releasing a number of case studies of projects that have really gone well and are in line with the principles set out in the Egan Reports. It is important to promote the good things that are happening in our industry as well as acknowledge there are key areas where we still need to do a lot better.

Annex

REPORT ON ACCELERATING CHANGE TARGETS AT END OF 2007

Target

Progress by End of 2007

20% of construction projects (by value) should be undertaken by integrated teams and supply chains by the end of 2004 and 50% by the end of 2007

A provisional survey in 2004 survey suggested that:

— At least 13% of projects are integrated;

— Over half of major/repeat clients say projects undertaken in integrated way; and

— Three-quarters of clients with integrated projects say it had led to time and cost savings.

Assessing the extent to which integration occurs throughout the supply chain on individual projects is extremely difficult to do on any significant scale and so we are now using information obtained by Constructing Excellence as part of the annual KPI survey when individual parts of the supply chain are asked about their experience of working on projects. In the information obtained for 2006, percentages of those working in integrated project teams and supply chains was:

Project Teams Supply Chains

Clients 20% 12%

Main Contractors 20% 15%

Consultant 20% 14%

M&E Contractor 8% 4%

Product Manufacturer 12% 13%

This information confirms that the industry has failed to meet the Egan Target

20% of construction projects (by value) should be procured by clients that embrace the principles of the Clients" Charter by the end of 2004, rising to 50% by the end of 2007 Over 300 organisations signed up to the initial Charter, but difficult to assess extent to which this covered the value of construction projects in the way the target suggests. Therefore we will not be providing any measure against the 2007 target.

Target no longer applicable and new way of measuring client leadership with new targets will be announced on 11 June

By 2006, 300,000 qualified people to be recruited and trained in the industry Labour Force Survey (LFS) shows that there was a net increase of 253,731 people recruited into industry between 2002 and 2007. Taking into account the number that will have left the industry over this period it is estimated that the target set for 2006 was exceeded.

Target met

By 2007, a 50% increase in applications to built environment higher and further education courses UCAS figures show that applicants to built environment higher education courses increased from 6341 in 2002 to 10,680 in 2007.

Target met

By 2010, an increase in the annual rate of apprentice completions to 13,500 In 2007, 8289 Apprentice Framework completions to which need to be added Summit Skills apprentices.

Considerable progress been made and Target on the way to being met

By 2010, a fully trained, qualified and competent workforce on all projects Take up of cards by MCG members now over 90% and around 80% for CECA and NSCC members. Take up of cards across the whole industry around 80%.

Target on the way to being met.

By end of 2004, 500 projects have used the Design Quality Indicators. By end of 2007, 50% of all publicly-funded and PFI projects (having a value in excess of £1m) to use DQIs. 2004 target exceeded with over 600 projects using DQI or one of its variants at that time.

2004 Target met

2007 target more difficult to measure because value based and focus of DQI work has varied from one building type to another. In Education, for example, it is estimated that in 2007 in excess of 90% or projects over £1m initiated in 2007 are using DQI.

By 2007 considerable further progress been made but Target set very difficult to measure. New Target being developed that will take account of these issues and allow for easier measurement.



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