Construction Leadership Council: waste of space or force for change?

Construction Leadership Council: waste of space or force for change?

Rudi Klein is a barrister and former chief executive of the Specialist Engineering Contractors’ Group

Ten years after the Construction Leadership Council (CLC) was formed, it’s yet to hit any of its original targets – and it looks unlikely to get anywhere near them by its 2025 deadline

Construction in 2025 is no longer characterised… by late delivery, cost overruns, commercial friction, late payment, accidents… In short, by 2025 construction has been radically transformed.” This optimistic vision is from Construction 2025, published in 2013 by the then Department for Business, Innovation & Skills (BIS). The department also set up the CLC to deliver the Construction 2025 targets for transforming the industry:

  • A 33 per cent reduction in capital/wholelife costs (based on 2009 prices).
  • A 50 per cent reduction in delivery times.
  • A 50 per cent reduction in greenhouse-gas emissions.

Now that we have reached the CLC’s 10th anniversary, it is appropriate to take stock of its performance. But first, a few facts about the CLC.

“The CLC has become a convenient funnel for pushing matters into the long grass and thus reducing civil servants’ workloads”

The CLC is an appendage of BIS’s successor, the Department for Business and Trade, which provides the secretariat and appoints its board members. The department has given the impression that the CLC is a representative body for the industry.

When construction matters are raised in Parliament, it’s always convenient for the government to respond that they are being addressed by the CLC.

As such, the CLC has become a convenient funnel for pushing these matters into the long grass and thus reducing civil servants’ workloads.

The CLC’s board comprises civil servants and large client organisations, with two seats for the industry filled by the group chief executive of Mace and the chief executive of Atkins. The chief executives/directors of SMEs and small firms – comprising the vast majority of the industry – don’t get a look in. Its co-chairs are construction minister Nusrat Ghani MP and Mace chief executive Mark Reynolds.

It’s not absolutely clear to whom the CLC is accountable for what it does (or doesn’t do). If we are to judge the CLC’s performance over the past 10 years, we only have the Construction 2025 targets as the key performance indicators. Set against these, the CLC’s performance has been woeful.

Lord Aberdare recently asked the government to report on the targets’ progress. Not surprisingly, the Earl of Minto, on behalf of the government, couldn’t give an answer other than that the outputs from the Transforming Construction Challenge programme “demonstrated that it is possible to meet and exceed the targets set in Construction 2025”.

The good earl seems not to have noticed that we only have 18 months to reach those targets.

The programme cited by Earl Minto aimed to modernise the industry through the use of innovative products based on digital technologies and modern methods of construction. But the earl’s statement appears disconnected from the real world. Where is the investment going to come from when much of the sector is stuck in an antediluvian commercial quagmire?

So far, not so good

Reading University’s Professor Stuart Green was commissioned by the Finishes and Interiors Sector to carry out a survey of commercial and contractual practices. In the June 2023 edition of Construction News, he wrote that bullying to achieve the lowest price and risk-dumping were the norm. An alarming statistic was that 65 per cent of subcontractors were forced to reduce their bids most of the time.

Payment performance continues to deteriorate and insolvency risk is at its highest since the financial crisis almost 15 years ago. Since January 2018, when the consultation on ringfencing retention monies was closed, supply chain firms have lost approximately £1.5bn of retentions due to upstream insolvencies.

Some years ago, the CLC made much of its Supply Chain Payment Charter, which aimed to achieve two key targets. By 2018 we would all be paid within 30 days and by 2025 we would have zero retentions. Yet more missed or to-be-missed targets.

The CLC’s current vision is to “lead a new era in the built environment”, which is nothing more than a meaningless platitude. Strategies, priorities and programmes come and go without any attempt to assess the impact of any of its initiatives – if you can describe them as such.

Achieving net-zero carbon has been a frequent CLC refrain, but the powers that be don’t seem to connect all the 2025 targets to net zero. Cutting construction costs through reducing wasteful practices (such as overcoming the divide between design and construction) and delivery times is much more likely to go a significant way towards achieving net zero.

Dysfunctional and outdated business models

Whether one judges it by reference to the targets or its current priorities, the CLC doesn’t seem to grasp the nettle that long-term transformational improvement is nigh impossible while the industry’s delivery systems and business models remain dysfunctional and outdated.

Fundamental changes in the way construction is procured and paid for are required. For example, the oft-repeated exhortation to increase offsite manufacturing ignores the fact that advance payments are rare and payment cycles usually commence once onsite activity is underway.

This was the essential message in a report commissioned by the CLC in 2016, Modernise or

. The hard-hitting report, written by Mark Farmer, concluded that the CLC’s Construction 2025 “targets for lower costs, increased speed, carbon reduction and more exports, look impossible to achieve based on the findings of this review”.

One of Farmer’s “core recommendation principles” – all largely ignored by the CLC – was: “Change in the construction industry will only happen through a strategic intervention that has strong leadership behind it and makes financial or wider outcome-led sense for all key parties.”

A new way forward

Whether the CLC survives beyond the next general election is an open question. The next government should establish by statute an independent regulatory body with the focus on delivering industry improvement. This body should be well-resourced and could even merge with the existing Building Safety Regulator. It should have the authority to drive best practice throughout all aspects of construction delivery, especially procurement and payment performance.

An independent regulatory body focused on implementing improvement is more likely to have resonance in the industry than a body dominated by the vested interests of government and very large client/contractor/consultant organisations. My advice to businesses is to prepare for the next election by proposing this solution to both existing and prospective MPs.

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