Craning Their Necks
Key Contact: James Williams
Author: Mark Summers
Construction’s leaders turn their sights to the post Covid-19 recovery
This week the Construction Leadership Council (CLC) – a high-profile organisation which brings together contractors, clients, academics and other key stakeholders in the industry – published its “Roadmap to Recovery”; a detailed set of proposals to guide the sector back to robust performance.
In its pitch to a government likely to be inundated with competing requests for financial assistance in the coming months, the CLC states: “Construction is uniquely placed to drive the national economic recovery”.
While the woes of the automotive and aviation industries have garnered more headlines in recent weeks, the CLC is at pains to point out that the economic output of the construction sector is nearly four times that of those two industries combined.
By the CLC’s count, the sector employs 3.1 million people across 405,000 firms in the UK, including 2.3 million people who work in contracting. Nearly a million construction businesses operate as sole traders, while around 41 per cent of workers in the sector are self-employed.
That’s a profile which has left the industry badly exposed to the current crisis – a raft of site closures followed the UK government’s initial lockdown and social distancing measures will complicate efforts to get back to full speed. The CLC highlighted the results of a survey taken in April in which nearly half of the 4,500 construction firms surveyed reported they had scaled back their activity by at least 80 per cent.
The Road to Recovery
Recovery from such a precipitous fall in output will be “gradual”, the industry body admits, estimating it will take two years for the sector to fully regain its previous level, with most of this revival taking place in 2021.
But the CLC’s roadmap is mindful that the first steps can’t wait until then – and with 93 per cent of infrastructure and construction sites in England and Wales now open, according to statistics compiled by industry body Build UK, the sector’s leaders are making their case for construction to be the engine of the economic recovery.
Contractors received praise for the speed in which they assembled the temporary Nightingale hospitals as virus transmission rates reached their peak – and now the CLC is making the case for the construction sector to be at the vanguard of government-led efforts to revive the economy, citing its “fast cashflow” and beneficial interactions with “local supply-chains”.
But the CLC have also allowed themselves to look beyond the pressing demands of the current crisis and their roadmap calls for a radical overhaul of the construction industry – one that will prioritise reducing its carbon footprint, increasing the utilisation of digital technologies and “delivering better, safer buildings”.
3 Steps to Heaven
The 2-year roadmap is divided into three sections.
The first – “Restart” – governs the next three months and calls for the industry to “restart work on the broadest basis”. Among the measures the CLC considers crucial to creating the “critical mass” it says is needed to get the construction sector back on its feet are the provision of “effective guidance on the safe operation of construction sites” and “training for workers on implementing safe procedures”; the use of test, track and trace services for construction workers; the expediting of the design and planning stages of public sector projects and swift clarity from the private sector on their likely project pipeline in the months and years ahead.
The CLC are also advocating for the government and local authorities to allow developers and contractors to “extend working hours on sites where reasonable to do so”.
The second stage of the plan – “Reset”- sets out the priorities for the industry for the nine months after the conclusion of the 3-month Restart phase. Chief among these is the call for a substantial government intervention to stimulate demand across a wide range of construction areas, to include “road, rail, flood defences, utilities, education, healthcare, housing (new build and maintenance), justice, security and defence”.
The CLC are also calling for a 12-month delay in the introduction of a new VAT regime for the industry – the so-called Reverse Charge VAT system – until October 2021. The industry would be helped by the authorities considering “flexibility around Apprenticeship Levy contributions”, which many firms are currently obliged to make. The body are also asking the government to accelerate the cladding remediation programme it initiated following the Grenfell Tower tragedy, saying this could create a “pipeline of early work” for some firms.
The final stage of the roadmap is named “Reinvent” and has been designed to govern the second year of the CLC’s two-year plan. With the industry expected to be back on its feet in a year’s time, it is at this stage its key stakeholders should be trying to create a more sustainable future, the organisation says.
That means the greater use of “offsite manufacturing in the delivery of homes and commercial construction projects”; the embedding of net zero carbon 2030-2050 targets in new infrastructure and housing developments; creating more streamlined and digital planning and building control services and increasing the construction industry’s exports overseas.
It’s a challenging workload for an industry dealing with unprecedented circumstances – but the CLC warns there is no time to waste.
“Failure to act,” it says “risks the industry lapsing into a longer term recession, which erodes capability and skills, and leaves a smaller, weaker sector as a legacy.”
For more information on any of the topics raised, please get in touch with our Construction Team.