Memorandum submitted by the Institution
of Civil Engineers (ICE)
1. INTRODUCTION
1.1 The Institution of Civil Engineers (ICE)
is a UK-based international organisation with over 80,000 members
ranging from professional civil engineers to students. It is an
educational and qualifying body and has charitable status under
UK law. Founded in 1818, the ICE has become recognised worldwide
for its excellence as a centre of learning, as a qualifying body
and as a public voice for the profession.
1.2 ICE is a member of the Construction
Industry Council (CIC). In addition to this submission the CIC
are combining with the Construction Confederation and the Construction
Products Association to present a joint industry-wide submission.
1.3 Construction accounts for circa
5% of UK GDP on a narrow definition (on-site construction activity)
and 10% of GDP on a wide definition (including professional services
and the manufacture and sale of construction products). Based
on this wide definition the construction industry employs three
million people in 350,000 firms and Government accounts for circa
40% of UK annual construction spending.
2. TRENDS
2.1 Output and demand, particularly in London
and the South East is expected to rise significantly in the next
five years. It is anticipated to peak in 2008-09. The Olympic
build represents just over 5% of new construction in the South
East during the period 2006-12.
2.2 Health and safety risk management is
improving. However, there were 71 fatalities in 2004-05; the same
as in 2003-04. During this period there was a 5% drop in major
injuries to employees to 3,760 major injuries in 2004-05 from
3,978 in 2003-04. ICE endorses the new CDM regulations which focus
on improving health and safety risk management performance.
2.3 Skills: The industry requires in the
short-term 30,000 additional operatives, designers and managers.
In the long-term there are serious issues surrounding the diminishing
supply of engineers. Full-time civil engineering undergraduate
numbers have fallen by 28.69% between 1997-2004 (12,495 down to
8,910).
2.4 Innovation: Research and innovation
time series data on R&D investment is not available, however
indications are of a significant fall in the last 25 years. ICE
welcomes the tax credits for research outlined in the 2006 budget,
but more action is required, including improvements to academia-industry
knowledge transfer. The UK also needs to drive down the costs
to industry of investing in research. The failure of the UK to
attract investment in research is a serious issue. Investment
in research fell in the UK last year whilst it rose in other industrialised
nations.
3. CIVIL ENGINEERING
3.1 While construction and civil engineering
is often viewed within the parameters of "hard" major
infrastructure development, they also have a "softer"
side which has an effect on other important areas of government
policy, such as new schools, hospitals and house building programmes.
As a further consequence construction and civil engineering help
deliver government's wider social and health policy goals, for
example developing sustainable communities and improving quality
of life.
4. LONG-TERM
CAPACITY FOR
THE DELIVERY
OF LARGE
INFRASTRUCTURE PROJECTS
ON TIME
AND TO
BUDGET, SUCH
AS THE
OLYMPICS
Availability of skills
4.1 In March 2007 the Construction Skills
network published, A Blueprint for Construction Skills 2007-11.
This estimated that in the period 2005-11, employment in construction
will grow by 17.5% from 2.41 million to 2.8 million. In practice
an average of 87,600 workers will need to be recruited annually
to meet this growth and to replace people leaving the industry.
Within this overall figure:
— Construction professionals and
technical staff will rise from 277,550 to 302,010, with an average
annual recruitment requirement of 12,340.
— Construction managers will rise
from 193,250 to 211,140, with an average annual recruitment requirement
of 6,270.
— Senior and executive managers
will rise from 9,270 to 9,820, with an average annual recruitment
requirement of 200.
4.2 This study confirms that demand will
be acute in London and the South and East of England and we explore
the situation in the region in some detail below.
4.3 The Committee should be aware that significant
pressures exist elsewhere in the UK. The practical task of recruitment
may be harder in the relatively closed markets of provincial regions
which do not share the cosmopolitan attractions and pressures
of Southern England. As an example the Scottish Executive's planned
£3 billion capital investment programme in strategic road
and rail projects will see an average annual growth rate in the
Scottish infrastructure sector of 6.2%; one of the drivers for
a projected 8% growth in construction employment between 2007-11.
Figures for total construction employment can also mask an imbalance
between general construction employment and the demand for the
much smaller pool of technical experts and professionals. The
North East England is projected to see a growth rate of 7.7% for
professionals against an overall growth rate of 4%, whilst the
figures in North West England are 10% and 6.6% respectively.
4.4 Construction is the most white and male-dominated
of all major industrial sectors. Women, make up only 7% of ICE
membership. We do not know the make up of ethnic minorities in
the profession, although according to CITB-ConstructionSkills
ethnic minorities make up only 3% of built environment professionals.
Similarly we do not know how many disabled civil engineers there
are, although it is estimated that they account for less than
0.3% of all construction professionals.
4.5 Research on women's and ethnic minorities'
experiences within construction have shown that the industry reproduces
a white male culture in which women and ethnic minorities experience
marginalisation, discrimination, disempowerment, prejudice and
"glass ceilings" to their career progression. This,
in turn, leads to vertical segregation within construction firms.
4.6 In less than six years, the Commission
for Racial Equality estimates that only 20% of the total UK workforce
will be the current white, non-disabled, males that have traditionally
made up the construction industry's recruitment pool. This means
that the industry has to diversify. According to the Disability
Rights Commission, one in every five people of working age is
disabled. Disability also increases with age, and, with the population
as a whole aging, it is likely that there will be increasing numbers
of disabled people in the labour market in the future. Furthermore,
employment rates for women of working age continue to rise. Clearly,
the industry will need to promote equality and encourage greater
workforce diversity to ensure a sustainable civil engineering
workforce for the future.
London and Southern and Eastern England
4.7 The ConstructionSkills forecast model
for 2007 to 2011 in London indicates a 13.5% increase in workers,
with a 4% growth in the South East and 13.4% in Eastern England.
In total, demand for workers across the three regions will rise
from 925,560 to 1,045,750 at an average annual requirement of
36,600. Once again within this overall figure:
— Construction professionals and
technical staff will rise from 119,510 to 130,060 with an average
annual recruitment requirement of 5,200.
— Construction managers will rise
from 77,990 to 86,980, with an average annual recruitment requirement
of 3,150.
— Senior and executive managers
will rise from 3,780 to 4,310 with an average annual recruitment
requirement of 190.
4.8 Similarly, a December 2005 study for
the Highways Agency (HA) on issues around the M25 Design, Build,
Finance and Operate (DBFO) project found that an additional £37
billion (over and above a nominal "average" period)
of increased construction investment was needed between 2006 and
2013 in the London and the South East. The Olympics were projected
to account for circa 5% of this additional demand, with
the remainder made up of commercial office building, infrastructure
(mainly rail), government spending on the Thames Gateway developments
and the M25 DBFO. In relation to professionals the HA report calculated
that by 2008 an extra 1,628 designers and 3,256 extra managers
would be needed to service the projects in London and the South
East.
4.9 A significant proportion of the additional
professional staff highlighted by these two studies will need
to be drawn from the civil engineering profession. The ConstructionSkills
report identifies infrastructure as one of the major drivers for
growth both nationally and in London and South and Eastern England.
London will see the final stages of Heathrow Terminal 5, extensions
to the Docklands Light Railway and East London Lines and of course
Olympics infrastructure. Eastern England infrastructure growth
will include expansion to ports at Harwich, Felixstowe and Great
Yarmouth and Dunstable Northern bypass.
4.10 Earlier ConstructionSkills figures
show that there are on average 1,200 civil engineers graduating
every year and that the total population of fully qualified practicing
civil engineers is circa 60,000. In addition, at the professional
level, training takes typically four years academic study followed
by five years vocational experience. These figures indicate that
there is likely to be recruitment into London and South and Eastern
England from other UK regions and that additional overseas professionals
will be required. In practice many of the largest consultant and
contracting companies are already recruiting staff from Europe
as a matter of course.
4.11 While we believe that this is a situation
the industry is able to cope with, there are significant management
issues raised by both a multi-national workforce and short-term
movement of workers from other parts of the UK, not least around
health safety and welfare. ICE has recently commissioned a study
from the University of Loughborough to examine these issues in
relation to migrant workers, which is due to be completed in autumn
2007.
— The ConstructionSkills model
quoted above does not include forecasts of skills required in
transport or utilities. These are included within Goskills, E-skills
and Energy and Utility skills. Given pressures on technical skills
and the need of industry to plan ahead for major forthcoming projects
such as Crossrail, the DTI should review the coverage and cross-working
of these bodies to ensure that modeling provides an accurate picture
of future skills requirements across all industries.
— There are also a large numbers
of engineers and other construction professionals who have left
the industry following academic study. It would be of benefit
to encourage these workers back into the industry.
— All parties must do more to
understand and address the health, safety and welfare issues raised
by both increased use of migrant workers and UK workers living
away from home for extended periods of time.
Maintenance of standards
4.12 Much of the activity in the construction
sector is unregulated with voluntary schemes of professional qualification
and competency being the norm. Professional institutions, such
as ICE, promote competence and ongoing commitment to professional
development through professional qualification.
4.13 Members of a number of professions
are required to be licensed by statute in order to practice. In
the UK this includes all health professionals working in the NHS,
solicitors, teachers in state schools in Scotland, gas installation
businesses, chiropractors and architects. Architects are governed
by the Architects Act, 1997. In the absence of mandatory licensing
of engineers and engineering technicians, professional institutions
such as ICE have to promote the value of membership and, de
facto, professional qualification to all stakeholders including
aspiring members, employers, and clients. Competence schemes exist
throughout the industry and some, notably the Construction Skills
Certification Scheme introduced by the Major Contractors Group,
are valiant attempts to drive competence and skills across all
levels of the industry with emphasis on Health & Safety Risk
Management. However professional qualification goes further.
4.14 Undertaken voluntarily, professional
qualification through bodies such as ICE is the demonstration
of competence and professional commitment to independently audited
standards and processes. Licensing bodies such as ECUK and the
Society of the Environment, which control the titles Chartered
Engineer, Incorporated Engineer and Engineering Technician for
the former, and Chartered Environmentalist the latter, are an
effective means of establishing competence standards across a
wide range of disciplines. Professional institutions play the
vital role of qualifying their members to these standards, and,
by providing knowledge and support through Continuing Professional
Development (CPD), the mechanism to maintain competence. We would
wish to see clients demand high qualification standards from those
they consult and contract as a matter of course.
4.15 Professional qualification is also
the underpinning competence required by the many Specialist registers
and lists that have been developed and introduced either through
Statutory Legislation (eg Qualified Civil Engineers [Panel Engineers]
under the Reservoirs Act 1975), demonstrable societal need (eg
the conservation accreditation register for engineers [CARE]),
or in response to specialist industry need (eg the Construction
Health, Safety & Welfare Register to demonstrate the competence
requirements for Co-ordinators under the CDM Regulations). These
registers and specialist lists have a key role to play in setting
and maintaining standards and in promoting their appropriate use
and value. ICE would again wish to see clients making appropriate
and effective use of these.
5. GOVERNMENT
AS CLIENT
5.1 Whilst there are issues for the industry
to address, it is the government, which in all its guises is by
far the UK construction industry's largest client, that must play
its part. The increased use of partnering arrangements requires
government clients to behave differently. In addition clients
must have access to high-level skills in estimating risk, programme,
project and commercial management. Without these skills Government
will struggle to set realistic budgets and timeframes, and to
manage projects effectively. Finally there are strategic and institutional
issues which are currently hindering the ability of government
to deliver its capital investment programme.
Partnering
5.2 The UK construction industry has, since
the mid 1990's, moved away from adversarial contractual relationships
to the framework and partnering approaches as recommended in the
Latham and Egan reports, and endorsed by the National
Audit Office (NAO) and embodied in NEC3 Contracts. Partnering
is not, however, an easy option and to be effective needs to be
much more than a statement of intent. Partnering principles should
cover enforceable aspects of the contract between the various
parties. However importantly there must be a genuine two way relationship
with real commitment to sharing risk and reward on an equitable
basis. This applies to government as well as its private sector
partners. When problems arise on large projects, clients will
be better served by a willingness to work within arrangements
that allow for an equitable sharing of additional costs, rather
than striving to maintain a budget that is unachievable, and in
so doing damaging relationships with their delivery partners.
In an extreme example of this approach, BAA has assumed all the
project risk for the Heathrow Terminal 5 contract itself and put
in place co-operative arrangements with its contractors based
on the principles of problem-solving and benefit sharing.
5.3 BAA has taken this approach after studying
the failures of other "mega-projects" where efforts
to transfer major risks to contractors led to outcomes damaging
to the project including:
— A focus on blame avoidance,
rather than working co-operatively, to solve problems particularly
those created by other contractors.
— Underbidding and undercharging
for risks to secure contracts being followed by efforts to recover
costs later, for example through squeezing subcontractors or charging
for unforeseen extras.
— Contractors pursuing individual
gain, rather than looking to maximise benefits and efficiencies
over the whole project.
5.4 This approach will not be suitable for
all projects and requires a large contingency to be built into
projects. It also requires the client to have the skills to be
able to challenge contractors on value for money and to put in
place a robust incentive scheme to encourage the client to perform
well. However, Terminal 5 is scheduled to be delivered on time
and to budget.
— Government should ensure that
the attitudes, structures and skills are in place to ensure that
it can realise the benefits of long-term partnering arrangements
with the construction industry.
Institutional issues and public sector client
skills
5.6 We would advise the Committee to study
the March 2007 report by Mike Nichols (a Fellow of ICE) to the
Department for Transport on cost over-runs in the Highways Agency
major roads programme.
5.7 Nichols pointed to the difficulties
the Department for Transport had in fulfilling its oversight and
sponsorship role for its Agency's road programme. This resulted
in a strategic vacuum, with no link between (unclear) policy goals
and the list of projects making up the Highways Agency capital
works programme. This created obvious problems for prioritisiation
and resource allocation, a situation exacerbated by a lack of
clarity on the governance arrangements between DfT and the Agency.
5.8 This report identified a number of operational
issues. In particular that the Agency was setting "final"
budgets at too early a stage of projects, when they were surrounded
by uncertainty, and proposed that a variant on the model used
by Network Rail should be employed. This allocates funding on
a three-stage basis covering requirements definition, development
and construction. He also identified that Agency had suffered
from the loss of experienced staff and should look to improve
its capacity in estimating, risk management, retention of skilled
staff, and programme, project and commercial management.
5.9 The Office of Government Commerce (OGC)
has produced guidance on "fair payment" practice by
public sector clients, including payment within 30 days. This
should lead to a "Fair Payment Charter" to be adopted
by all public sector clients. Fair payment practice is vital for
a healthy industry, particularly smaller contractors down the
supply chain.
— Government should consider if
the problems and solutions highlighted in the Nichols report on
the Highways Agency Major Roads Programme are relevant in other
areas of the public sector, particularly where there is a lead
department/agency relationship.
6. IMPROVED CO
-ORDINATION OF
THE GOVERNMENT'S
CAPITAL INVESTMENT
PROGRAMME
6.1 At present there is little evidence
of serious co-ordination of major capital investment programmes
emerging from different departments and agencies. Further consideration
of the Government's capital investment and expenditure programmes
over time will allow companies to maintain and grow their staff,
skills and employment practices. The current environment of boom
and bust within different engineering and construction industries
allows many workers and skills to leave the industry and the country.
It is far more difficult to entice these professionals back when
the work returns. An example of this is the nuclear industry.
Any construction of nuclear power stations would now require a
substantial import of skills from outside the UK when the previous
building programme used domestically sourced professionals. Major
investment in sectors such as energy, transport, waste facilities
and flood defenses are expected over the coming decade. We therefore
welcome the Chancellor's commitment in his pre-budget report in
December 2006, that as part of reforms to the planning system
Ministers will be responsible for statements of long-term need
and hope that this increased visibility leads to much improved
co-ordination of workflow between departments. Spikes of demand
can also create short-term difficulties in sourcing and delivering
plant and materials.
6.2 Investment in infrastructure is often
compromised, unlike in other publicly funded sectors such as health
and defence. This often leads to elected officials rejecting plans
or imposing delay. For example, regional decision-making bodies,
such as Regional Transport Committees are refusing to commission
urgent highway improvements because the project will eat into
their budgets. To ensure that infrastructure receives similarly
consistent funding to the health and defence sectors infrastructure,
investment must be depoliticised to eradicate the assumption that
it can easily absorb cuts.
6.3 The Committee should be aware that construction
inflation is currently running at circa 6-7%, which is
considerably above the standard measure of inflation in the economy.
In addition, within this headline figure there is a degree of
complexity. Increased international demand has led to considerable
volatility in the price of some raw materials, notably steel,
whilst variations in the price of energy have also had a significant
impact.
— A realistic assessment of overall
construction inflation and the volatility of prices for materials
and energy should be a feature of government construction procurement.
7. THE OLYMPICS
7.1 In relation to the Olympics, and indeed
to other major programmes, the Committee should be aware that
as a project, it is of a different character to the type of ongoing
commercial relationships on which alliancing, partnering and frameworks
rely. It is to all intents and purposes a one-off project with
a fixed end date and an increasingly politically sensitive out-turn
cost. In this context what needs to be avoided is a model whereby
the client creates its own Project/Contract Manager from within
its own organisation (or the Project Manager and the Client are
really the same organisation). This approach is flawed because
the drivers for the client and the Project Manager should be entirely
different.
— Government should ensure that
in relation to the Olympics and other major programmes, the roles
of Client and Project Manager are clearly defined and separated.
7.2 It is also notable that the Thames Tunnel
and Crossrail projects will be working closely together to share
equipment, skills and planning programmes to maximise the efficiencies
created by the similarities of these two projects. Further identification
of project similarity could deliver considerable cost savings,
minimise disruption and also develop a broad range of required
skills.
— Government should give consideration
to its long-term investment programme and give clear indications
of long-term plans in different engineering and construction sectors.
Statements of long-term need promised by the Chancellor in his
pre-budget report should be accompanied by increased cross-Government
planning of construction work flow.
— Government should work to identify
similar projects in its overall programme and exploit opportunities
for efficiency savings by sharing equipment, skills etc.
8. CONSTRUCTION
R&D
8.1 Investment by the industry itself into
construction R&D has traditionally been considered to be low
compared to other sectors. However, there is a lack of clear figures
and definitions, for example much design work on one-off projects,
might in other sectors be classified as R&D. There are however,
a number of issues which militates against investment in R&D.
8.2 The industry's products are often very
heavily specified by clients, who should be the driver for product
development to avoid wasted research funding. At least two major
public clients, Network Rail and the Highways Agency operate their
own standards department, which obviously have a major impact
on final specifications. This situation does not create a good
incentive to invest in R&D as any new product or technique
faces a lengthy and uncertain approval procedure. Encouraging
clients to set functional requirements has the potential to encourage
innovative solutions from contractors.
8.3 A second issue is that much of the financial
or other benefit of construction R&D accrues to society in
general, for instance in the form of reduced environmental impact
or higher performance standards of public buildings. The sector
has therefore traditionally looked to government to overcome the
collective action/free rider problems this situation appears to
inevitably entail.
8.4 In terms of Government support, the
DTI's construction specific Partners in Innovation Programme was
closed to new applications in 2002, when the department moved
away from sector specific research to embrace a thematic approach
to industry support. Construction has not always been successful
in attracting funding from this source. One result of this situation
is that whilst support for academic research through the Research
Councils remains high, the number of projects that codify technological
breakthroughs into industry codes of practice has declined. While
this is only one knowledge transfer path it remains a concern.
In general, the fractured, unconsolidated nature of the sector
does make knowledge transfer and the spread of best practice a
problem for the UK construction industry. DTI's Innovation Strategy
recognises this as a generic issue for the UK and is funding a
raft of knowledge transfer Networks (KTNs) which aim to build
up a critical mass of well connected and well informed people.
However, it is unclear how KTNs will break down the commercial
disincentives for knowledge sharing or if they will be successful
in drawing in participants from SMEs who make up a large percentage
of the UK construction industry. All of these issues could impact
on the industry's capacity to innovate and maintain its competitive
edge.
8.5 A difficulty in assessing the level
of government support for construction R&D is the fragmentation
of responsibilities across departments and agencies. Whilst DTI
support has declined, other aspects of construction, for instance
flood defense, water supply, energy are receiving R&D support
elsewhere in government. Furthermore, fragmentation not only across
government but also across public procurement and industry, has
led to a lack of buy-in to the untapped resource of EU funded
research programmes.
8.6 The Committee should also consider the
influence of the government's role as client on R&D expenditure.
In principle the partnering type arrangements promoted elsewhere
in this submission should create an environment in which the government's
construction industry partners have an incentive to invest in
R&D to improve performance over the life of a 25-30 year concession.
— A government-wide assessment
of support to R&D for construction and infrastructure would
be valuable.
— Assessments of levels of government
support for construction R&D should take into account the
contribution of construction to meeting policy goals in other
sectors such as education and health, and in meeting broader policy
goals around carbon emissions and quality of life.
— Greater attention is needed
to mitigate the impact of any shortfall in R&D and knowledge
transfer on the industry's ability to absorb innovation and maintain
competitiveness.
— Government and industry should
assess if there is a significant link between contractual form
and R&D investment.
We would also hope that the Committee consider
if construction has suffered disproportionately from the disbanding
of sector specific support.
9. REGULATORY
MATTERS, SUCH
AS HEALTH
AND SAFETY,
AND THE
BUILDING REGULATIONS
Health and Safety Risk Management
Safety
9.1 The Health & Safety Executive's
approach to launching the revised Construction (Design and Management)
Regulations should be applauded for focusing on improving H&S
risk management performance on the ground, whilst reducing complexity
and bureaucracy. We also applaud the fact the revised regulations
make it clear that all partners in a project, including clients
and designers, have a shared responsibility for health and safety.
9.2 However, regulation alone cannot save
lives and it is unrealistic to believe that an Agency could police
an industry on the scale of construction. Driving cultural change
is, therefore, a major ongoing task, with industry taking a lead
in ensuring that individuals buy into H&S risk management.
UK performance does stand up to international comparisons but
there were still 70 deaths on site in 2006.
9.3 The importance of strong leadership
can, therefore, not be overstated and the personal commitment
of individuals such as Keith Clarke, CEO of Atkins, should be
applauded. Conversely the late opposition of groups representing
clients to the additional responsibilities placed on them under
CDM 07 was disappointing.
9.4 As with sustainability there is a great
opportunity for the public sector to use its procurement leverage
to drive improvements in the sector. This will require an enlightened
approach by public clients, who may need to shift focus from maintaining
adherence to a rigid budget at the capital expenditure phase of
a project to deliver long-term, non-monetary benefits. There is
a significant amount of guidance for public sector clients on
health and safety risk management from the Office of Government
Commerce and others. However, whilst some large bodies, for instance
the Highways Agency, are putting greater resources into meeting
their H&S risk management responsibilities, there is anecdotal
evidence that this is by no means universal—smaller local
authorities have being identified as particular culprits in this
area. Furthermore, 40% of all procurement contracts are with central
Government. While having the potential to lead on and make significant
impact on the health and safety risk management agenda, central
Government is presently too fragmented, hence becoming a poor
example of implementing its own aspirations.
9.5 As a professional institution ICE recognises
it has a major role in this area in ensuring members develop and
maintain H&S competence. In the last two years ICE has upgraded
the H&S competencies that must be developed during initial
professional development and made passing the H&S element
of the professional review compulsory for any candidate seeking
full chartered membership.
— All construction bodies with
skills/competency functions must prioritise health and safety
risk management to others.
— All public sector clients and
not just large agencies or departments should place close attention
to fulfilling their H&S duties and use their leverage to drive
good practice across the sector.
— Government should place greater
emphasis on setting quality health and safety risk management
examples and lead on the H&S agenda.
Health
9.6 The Institution would also support a
greater focus on the health aspect of the health and safety equation.
There are a number of serious health issues prevalent in the industry
including Musculoskeletal Disorders (MSD), Hand Arm Vibration
Syndrome (HAVS), Noise Induced Hearing Loss (NIHL), Dermatitis
and Mesothelioma. These problems can be exacerbated by the nomadic
nature of the industry, which can lead to employees having difficulties
accessing basic services. We do not believe the industry has been
as effective as it could have been in addressing these issues.
Again a cultural change is needed to encourage active case management
and effective communication between the employer, employee and
health support. This should have the benefit of allowing employers
to reduce the number of days lost through ill health.
Building Regulations and Code for Sustainable
Homes
9.7 Successive changes to the Building Regulations
since the early 1990s have led to significant improvements in
the energy/carbon performance of buildings, with energy efficiency
standards for new buildings now 40% higher than in 2002 and 70%
higher than 1990. However the low replacement rate of the building
stock (0.1% per annum) has meant that reducing the UK energy requirements
needed for heating and cooling buildings has not moved on at great
pace. The Chancellor's announcement in his budget for assistance
with insulating domestic homes is welcome, but attention will
need to be paid to the detail of the scheme, the pace of its roll-out
and the continuing need to improve the performance of non-domestic
buildings.
9.8 ICE welcomes the introduction of the
Code for Sustainable Homes, and in particular the promise that
it would flag upward movements in the Building Regulations, allowing
the main body of the industry valuable time to adapt. However,
we were disappointed that the original concept of a code for sustainable
buildings was watered down. We would also point out that the code
has narrow boundaries, covering making housing units, fittings
and appliances more sustainable. To get a true picture of the
sustainability performance of a building would require a series
of life cycle assessment of the structure and fittings to be carried
out in the context and location in which they are being used.
We felt it is important that guidance was issued with the code
to make users aware of these limitations.
— The government should consider
expanding the code for sustainable homes to cover all buildings
and provide guidance on limitations of a sustainability assessment
limited to structures, fittings and appliances.
10. ENCOURAGING
SUSTAINABILITY
10.1 Leverage from public procurement is
obviously a major opportunity. The report of Sir Neville Simms'
sustainable procurement task force found that, "incentive
systems neither reward sustainable procurement nor do they punish
failure to comply with existing policies in this area".
10.2 Government has responded with a package
of measures but the revision of central departments' Public Service
Agreements, as part of the forthcoming Comprehensive Spending
Review, is a major opportunity to address key issues identified
by Simms, such as the failure to properly assess long-term benefits
against up-front benefits and a failure to include non-financial
benefits in options appraisals.
10.3 One key area where progress is needed
is around the selection and use of materials and other resources.
Construction and demolition accounts for 32% of the total annual
waste arisings in the UK. Furthermore, a series of "Biffaward
Mass Balance" studies of the industry suggested that 350mt
of materials flow through the construction sector which generated
90mt of wastes while adding 270mt to the stock of buildings. Although
it recycles 46mt of materials, the amount still going to waste
disposal suggests considerable further potential for recycling.
10.4 We noted above that a positive aspect
of CDM 2007 is that it forces clients, designers and contractors
to integrate health and safety considerations into their plans.
ICE's Demolition Protocol, which has been promoted extensively
by the government's own Waste and Resources Action Programme (WRAP)
agency, extends this logic to material use. The protocol enables
users to make a realistic assessment of the material that can
be recovered at the demolition phase of a project and crucially
links this figure to the specification of materials for any new
build on the same site.
10.5 At macro level, ICE has regularly drawn
attention to the split in policy responsibility for Sustainable
Development across Government. As civil engineers we can contribute
strongly to delivering sustainable development, but would be greatly
helped by a policy framework making stronger linkages to be made
from the sustainability of infrastructure to longer-term quality
of life, conservation and biodiversity, and resource use impacts.
Our series of reports on resource management with the Institution
of Mechanical Engineers have demonstrated how the much needed
investment in waste processing infrastructure could realise wider
benefits if placed in such a framework.
— Government should revise PSAs
to ensure departments use procurement leverage to drive more sustainable
construction.
— Mechanisms such as the ICE Demolition
Protocol should be employed to focus the attention of clients,
designers and contractors on improving the efficiency of resource
use in the construction sector.
— Government should encourage
greater co-ordination between policy on physical infrastructure
and wider environmental and societal impacts.
11. BEST PRACTICE
ON CONTRACT
MANAGEMENT
11.1 We have made extensive comments above
on partnering, alliancing and frameworks. Developed by the ICE,
NEC Contracts encouraged the development of these concepts by
providing a flexible contractual framework that promoted a partnering
ethos by stimulating good project management. We believe these
principles should be regarded as best practise in contract management
and should be filtered down the supply chain.
11.2 ICE believes that there remains resistance
to this practice. In particular with regard to advice provided
by the legal fraternity to their clients, leading to standard
forms of contract being heavily amended and collaborative intentions
of contracts being heavily diluted. Therefore, we would recommend
that all parties to contracts should be encouraged to use the
same standard forms of contract to avoid the dilution of collaborative
intent.
11.3 Written in plain English, the NEC has
provided a step change in effectiveness of contract management
in the construction industry. It is gaining ground fast but needs
government promotion to speed up the process. We note that the
National Audit Office has endorsed the use of the ICE developed
NEC 3 Contract as a basis for such collaborative working and that
the OGC recommends the use of NEC3 by all public sector procurers
on their construction project. A similar endorsement by the DTI
would greatly assist in encouraging the private sector to adopt
the use of a collaborative and integrated set of contracts for
all construction projects and services. It would also be a powerful
tool for promoting a distinctive UK initiative in the international
market. In addition if central and local government are going
to support the contract they need to provide adequate skills and
sufficient resources in order to manage it.
11.4 However, contractual arrangements alone
will not guarantee success and is not a substitute for developing
the procurement and project management skills outlined above.
11.5 Finally, the competence of resources
particularly in local government is a significant issue. The volume
of resources is also significant with many individuals carrying
out procurement activities as only part of a complex portfolio.
This demonstrates a lack of appreciation that for any client the
procurement of built environment assets is a significant investment
and often prevents adequate interaction with the users and occupiers
of the asset. The outcome, therefore, continues to be unsatisfactory
both from the management of the provision of the asset and the
perceived value for money of the end product.
— All parties to contracts should
be encouraged to use the same standard forms of contract to avoid
the dilution of collaborative intent.
4 May 2007
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