Examination of Witnesses (Questions 571-579)
BERR, OGC
22 JANUARY 2008
Q571 Chairman: Gentlemen, welcome to
what is the very last evidence session of what has been one of
the most interesting, long and well contributed to inquiries this
committee has held. We were deluged with written memoranda. Then
we were delayed by a certain uncertainty about the future of the
department, which I am glad was resolved satisfactorily, so the
industry has been very patient in getting to this stage today
where we have you before us, and I would like to express publicly
my gratitude to everyone who has contributed so intelligently
and interestingly to our debate for so long, and now it is the
main event, as it were, with you, Minister, and your colleagues.
Can I begin by asking you, as I always do, to introduce yourselves
for the record, and I believe, Minister, on this occasion I am
going to be a weak-willed Chairman and allow you a brief opening
statement to set the scene.
Mr Timms: Chairman, thank you
very much for your kindness and your indulgence. I am the Minister
for Competitiveness with responsibility for the construction industry.
With me are Denis Walker on my right, who heads the department's
Construction Sector Unit, and Clive Young, who covers the unit
reporting on skills and people, and on my left Mark Pedlingham
is from the Office of Government Commerce. He is on secondment
there from the Ministry of Defence where he has held a very wide
range of engineering and procurement posts. He is the board member
in OGC responsible for the strategic engagement of markets and
suppliers and for work on procurement skills, and he is heavily
involved in what the Government is doing as a customer and client
of the construction industry and on the reform of the Government
Procurement Service, so is a very important contributor this morning.
The construction industry, as the committee will by now know very
well, represents a very large piece of the UK economy; it accounts
for about a twelfth of GDP, three million jobs, and it has been
a very successful industry over the past 10 years as well, benefiting
immensely from the stability that the economy has enjoyed. However,
its importance for government goes a long way beyond its economic
contribution. It is central to ambitions for good quality public
services, for better schools, hospitals, for example, and it alone
can deliver more housing, do it in ways that protect the environment
and build as well the infrastructure to create sustainable communities.
These tasks are central to the mission of government and the success
therefore of the construction industry in all these areas will
have a very big impact on the success of public policy. We set
out at the Comprehensive Spending Review in the autumn our 30
public service agreement goals and the construction industry,
I reckon, will make a direct contribution to 16 of the 30, so
construction is a critical industry for numerous departments.
Our department acts as the voice for business, the voice for construction,
in this case across the broad range of interests. I work closely
with the Strategic Forum for Construction and its constituent
organisations and it is my task to ensure that insight from the
construction industry influences policy development across Whitehall
and also in Brussels, and that government's work with the construction
industry to deliver policy objectives is as effective as possible.
The 2012 Construction Commitments headings that industry and government
signed up to last year ahead of the Olympics provide a good summary
of our current shared agenda—procurement and integration,
commitment to people, client leadership, sustainability, design
quality and health and safety. We are currently, for example,
developing a strategy for sustainable construction, working closely
between my department and the OGC's Public Sector Construction
Clients' Forum on the public sector role in supporting modernisation
in construction, developing a programme of public sector demonstration
projects on integration, developing an industry strategy for innovation
and reviewing the Construction Act to identify changes to improve
payment practices, and I very much welcome, Chairman, the opportunity
to discuss those matters with you.
Q572 Chairman: Thank you very much;
commendably brief. You said in your answer there that you reckoned
that construction had round about 12% of UK GDP.
Mr Timms: About 8%, one twelfth.
Q573 Chairman: Sorry; I meant one
in 12. The industry has given us a figure of up to 10%, so between
8% and 10%. Do you spend 8%-10% of your time on construction?
Mr Timms: No. I think I would
spend a good deal more than 10% on construction.
Q574 Chairman: You have a bewildering
portfolio. I am exhausted just reading it, and now you have lost
a minister from the department and your portfolio has expanded
modestly as well. You feel that you can devote the time and resources
to such an important ministry?
Mr Timms: Yes, I think so.
Q575 Chairman: Good, because I think
you have got a very important job. The thing that has struck me
about this industry is its diversity, which I suppose I knew anyhow,
but also the Government's diversity in response to this diversity.
It is a bewildering cobweb of organisations. In fact, your own
submission, quite rightly,—and we appreciate very much the
written submission we had from the department—included evidence
from OGC, DWP, the Department for Children, Schools and Families,
DCLG, of course, the Health and Safety Executive. A number of
government departments are big clients of the industry. You did
not include Defra, as far as I know, but they have a huge role,
of course, as well. It is very difficult for the industry to deal
with such a large department. Do you feel that the structures
are able to co-ordinate properly and enable the industry to flourish
and not get drowned in a miasma of acronyms and organisations?
Mr Timms: I certainly agree with
you that there is, for the reasons I have set out, a very wide
range of departmental policy interests in construction and it
is certainly right to include Defra amongst the others. I think
it is absolutely essential that we hold this wide range of interests
together and I believe that we can, and the way for us to do it
is for my department to work very closely with the other government
departments involved. A very good current example is the work
on the Strategy for Sustainable Construction where we have a project
board that is chaired by my department and that involves senior
figures from the other departments you have mentioned, including
Defra, OGC and Communities and Local Government, plus industry,
plus the Sustainable Development Commission, and in that way we
make sure that the strategy reflects the needs of industry and
of all the government departments involved. I think that is the
only way we can do it and I think if we organise ourselves in
that way we can do it successfully.
Q576 Chairman: You see, this committee
has heard on a number of occasions complaints about building regulations
being agreed very late up against a deadline, from the manufacturing
industry, for example, who implement the regulations themselves.
Would it not be better if that aspect, which is really a key competitiveness
issue as well, was handled directly by BERR rather than DCLG?
Is there not room for further machinery in government changes
to make it easier for the industry?
Mr Timms: The problem is that
the construction industry interacts with so many different parts
of government and building regulations is just one. If my assessment
is right, that the industry is contributing directly to 16 of
the 30 top level goals of government, that is the majority of
government activity directly affected. If one were to start going
down that road one would have to completely reorganise government
in order to suit the convenience of the industry. I do not think
that is the right approach. I think what we have to do is organise
government around the objectives that have been set for public
policy and then make sure, having done that in terms of the machinery
of government, that we are properly joined up between departments
to provide an effective interface for the industry. It is my job
to do that. I believe that we can. I certainly would be interested
in the conclusions of this committee arising from this work about
ways in which perhaps we can make some alterations to do a better
job in that respect.
Q577 Chairman: The industry often
says, "What we need is a minister for construction".
I know many interest groups say this. I do not think it is often
the answer to the problems, frankly, but you are the Minister
for Construction.
Mr Timms: I am.
Q578 Chairman: And you are convinced
that you can properly co-ordinate the machinery of government
to deliver the best possible outcome for the industry within the
very realistic constraints of public policy generally?
Mr Timms: Yes, I am confident
of that and I am very happy to look at ideas about how we can
do it better in the future.
Q579 Mr Hoyle: Can I just say to
you that the big conversation is that whenever you talk to somebody
from the construction industry they will say, "Oh, well,
we are being overwhelmed by people from Poland and other European
countries". What estimates do you have on the current dependency
of the UK construction industry on migrant labour?
Mr Timms: We have certainly been
greatly helped by migrant labour over the past few years; I think
there is no doubt about that, and I can provide some figures for
the extent to which we reckon that has been the case so far. The
proportion of migrants working in the construction sector has
increased since 2001 from 4.6% of the sector workforce to 7.7%
in 2006. The proportion in London was always much higher and it
has also jumped much further, so in 2001 it was 21.5%, in 2006
41.9%, so we have certainly benefited greatly from the support
we have had from migrant labour over the past years and, of course,
it has for a very long time been a characteristic of the construction
industry that workers have come from outside Britain.
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