Contractor Skanska rounded up some heavy hitters from the UK’s infrastructure clients to look at how the construction industry is likely to change post-Covid. Its Future of Construction seminar held on 30 July highlighted changes in procurement and the way that value is measured and incentivised.
Martin Perks, commercial programme manager, Highways England explained how his authority had adopted and adapted the Target Delivery Method from the US where it has been used for private sector delivery of hospitals.
“The value is really easy to determine. We can connect the cost with the value that project generates…so that the release and incentivisation…is related to the value that asset will deliver,” said Perks.
Perks explained that Highways England was now trying to look at value in terms how its assets – and their creation and maintenance – impact on road users and communities. “What we are really focussing on is the customer. Highways England has transformed the way we look at the asset. We are now focussing more acutely on the end user and the communities we impact, the neighbours, the stakeholders.”
Supply chain specialist Emma-Jane Houghton, who sits on the Expert Review Group for Crossrail 2, spoke about the need for a fundamental shift from “cheapness rules to value tools”. The only way to move from a transactional, risk transferring environment to one where there are better environmental, economic and societal outcomes was to “drop the decision making down and work as an integrator with the supply chain.”
Mark Thurston, CEO of HS2, spoke of the opportunity that the 20-year high-speed programme offered to develop new technologies and attract new people to the industry. “We know that construction, as a sector, has been a bit behind in tech and technology…we see a lot of good stuff coming through…The scale and longevity of HS2 gives us a chance to invest in some of these things.”
Thurston acknowledged the “wicked problem” of how to deliver social value to communities disrupted by the construction of HS2, particularly those along the route who could not see any immediate benefit to them from the project.
Economist and former Government advisor James Sproule said that countries’ recovery from the Covid-driven recession would depend on the agility of the economy; how quickly a country could retrain workers to embrace new careers and industries, for instance. Skanska UK CEO Gregor Craig highlighted the challenge for larger companies, such as his, in being agile and fast-moving.
Fergus Harradence, deputy director, construction, at the Department of Business, Energy and Industrial Strategy (BEIS) highlighted the recent publication of the Infrastructure and Project Authority’s Procurement Pipeline which sets out £37 billion worth of investment across 269 infrastructure projects, which should come to market this year.
The seminar also considered the future of offices. A poll conducted among attendees showed that 84 percent would ideally like to go into their offices between 1 and 3 days a week, rather than full time. Paul Patenall, president of the British Council for Offices, said that a survey conducted by his organisation had showed that 25% of companies were considering suburban satellite strategies.
Patenall also said that the Covid pandemic had accelerated some trends. Demand for high-spec office space where health and wellbeing were priorities would increase rapidly, he predicted.