Morrell points the way to 20% cuts

Morrell points the way to 20% cuts

An industry-led steering group is about to be announced to drive through the efficiency measures set out for public projects, chief construction adviser Paul Morrell tells Denise Chevin 

The policy machine really is in over-drive. In the past few weeks we’ve had the bones of a government Construction Strategy aimed at cutting costs of public projects. Two weeks later came an action plan for reducing carbon in the industry. Straddling both was a report containing more detail for making building information modelling mandatory across publicly funded schemes. That’s on top of the James review on school building post BSF.

We can expect another big announcement in mid-July, when more flesh is put on the Construction Strategy’s bones, including an industry-lead steering group to work out how the ideas in it will be implemented.

No wonder Paul Morrell, the government’s chief construction adviser, rarely clocks off before midnight. ”The job’s meant to be three days a week. But if I stuck to that I’d never get out to see people down the supply chain. Too much policy is made by people behind closed doors,”  says the former senior partner at QS firm Davis Langdon, over a coffee in the Department for Business, Innovation and Skills’ London headquarters.

Launches, conferences, dinners, meetings – Morrell’s attendance is so ubiquitous you might think he’d been cloned. But being generous with his time has gone some way to ensure the industry is largely behind his two flagship reports for taking out costs and carbon – which is, as he sees it, his key role.

“You can’t separate the challenges of carbon from the wider challenges the industry faces. They march hand in hand in a slightly uneasy relationship. The issue of too much carbon and not enough cash takes us to new and exciting places – I’ve become genuinely excited by it.” 

We’re at the early stages of achieving either, but what has emerged on both fronts is a framework and a commitment to drive them both through. The need to take 20% off the cost of public buildings is a coalition mantra. The Low Carbon Construction Action Plan is the government response to one produced by industry – a committee chaired by Morrell called the Innovation and Growth Team.

This was set running under Labour. The fact that the new administration has embraced much of the content, and has charged Morrell with taking them forward, is a welcome filip (see box below). Morrell will drive both agendas through powerful new committees.

There are three key themes in the Construction Strategy: the formation of a Construction Board; the use of BIM across public sector projects to galvanise the industry into operating in a more integrated way; and to drive better value using new forms of procurement.

This will include benchmarks for a job within a contractor framework, and recourse for the client to tender directly if none of the framework contractors meets the price. These new methods will be tried out on schemes next year.

The 12 to 14 members of the Construction Board will be announced by mid-July. They are likely to be many of the same people who sat on the Construction Clients Board – senior figures from spending departments and agencies such as Procure 21 and Highways Agency. The difference this time is that implementing agreed practice won’t be an option.

Says Morrell: “We need to spread best practice through the entire public sector because, as far as the supply side is concerned, they don’t differentiate – even though the reality between central and local government is very different.”

He is working closely with the chair of the National Improvement and Efficiency Partnership, the overarching body of all local authority regional frameworks. This is Andrew Smith, chair of Hampshire county council, who holds the brief for procurement across local government.

Two policies have already been mandated: use of a standard pre-qualification questionnaire and fair payment terms to get payment through the supply chain down to 30 days. Trade associations are being asked to police this.

Engagement with industry will come from the new steering group, says Morrell. “Beneath that steering group, which might have joint chairs or an industry chair, there will be time-limited task groups that will take specific issues and make them happen. So, there might be one looking at BIM, another at alternative procurement models, another at a very narrow issue such as whether we’re handling insurance properly.

“Those again will include government and industry people, and people from wider industry relevant to the topics, from which we will be able to bring together a detailed plan of where we want to get to for the next five years.”

There is definite confusion in the industry over BIM – when it might be used and at what level of project suppliers might not be expected to use it. Morrell says: “There isn’t a set cut-off point in value of project. It will be below the point at which it doesn’t create value for taxpayers, and I don’t know where that is. You wouldn’t expect small builders doing refurb projects to use a process that doesn’t add value to them or us – you’d take them out of the marketplace.

“For the first year of operation the limit of software you’ll need is Excel – that’s how gentle it’s introduction will be.”

Another big change Morrell will be driving through is the introduction of benchmarking to ensure that the public sector isn’t paying over the odds in framework contracts – an area that has alarmed some in the sector, who see it as undermining the partnering ethos.

“If you’ve got a framework, you have to work with that framework using the advantages it has in terms of early notification of the work coming to get more value out. Otherwise, all you are doing is closing the marketplace.

“There are currently more than 200 frameworks across the public sector in construction, and it defies common sense that all of those are creating value

“So no one is going around with a hatchet, but it comes down to this: if you’re restricting access to the market, you have to get your value out in some other way.”

One of the subgroups of the new steering committee will probably be dedicated to data collection and benchmarking, he says, and will be led by the Efficiency and Reform Group, formerly known as the OGC.

Any shake-up of frameworks is likely to be welcomed by SMEs, which have largely been shut out of great swathes of public sector work. Is there a role for them in government procurement?

“Absolutely,” says Morrell. “First of all, access to market is a big issue. I would say that quite a good principle for government is that you get a project done by the smallest firm that’s capable of doing the job, because in that way you are creating best value for the taxpayer.

“There’s also a belief in government that that’s where growth will come from – small outfits that are more nimble and run by entrepreneurial people. And, of course, they are in every constituency, so they are interested in that politically.”

He’s keen to point out that he doesn’t want to break up supply chains by supporting SMEs.  

“What we need is the tier one contractors to take a new interest in their supply chain. Where they want early notification of what’s coming, early involvement and continuous relationships, they should mirror that in the way the treat their supply chain, rather than opportunistically hawking a job around the market once they’ve got it.

“If they took care of their supply chain, then politicians wouldn’t need to to the same degree.”

Green light for low carbon construction

The industry has welcomed the government’s Low Carbon Construction Plan, despite its lack of commitment in key areas.

The joint government/industry plan, which outlines areas of research and action to help the sector meet UK emissions targets, calls on the RICS to establish a standard method of measuring embodied carbon. It also supports development of the European standard CEN/TC350 for whole lifecycle assessment of a building’s carbon performance.

Other actions include the creation of a Green Construction Board this year, chaired by construction minister Mark Prisk; development of a business plan to help reach a 50% reduction in emissions over the next decade; plans to start a government consultation on mandatory energy efficiency upgrades; and work by the RICS on using BIM to improve the sustainability of projects.

It could have gone further, says John Connaughton, head of sustainability at Davis Langdon: “No conclusion has been reached on the definition and measurement of embodied carbon... There are many competing methods and too many practitioners giving inconsistent guidance. RICS’ work clarifying this will be important but the report could have invited proposals from other institutions.”

The plan pledged to consider, not to implement, several recommendations – the creation of an existing homes hub to monitor retrofitting, mandatory use of display energy certificates, regulation to drive the Green Deal. It also dropped the suggestion the government include a whole life carbon assessment in its Green Book. 

Paul Morrell on ...

… the £2,000 it’s been estimated to cost per person to skill them up in building information modelling

“It’s a habit of this industry to see the cost of everything and not the benefits. The answer is: if you don’t think it’s going to create value for you, then don’t train your people.”

… what contractors should be thinking about now

“Building their supply chains – putting themselves in a position where they can create better value for the public sector. They are slow 
to develop propositions beyond expressions of dissatisfaction.”

… more for less

“I understand why to a politician there is a value in quantity. If you’re one of the have-nots, I think you’ll see a value in quantity too. So when it comes to the design of schools, say, we have to aim for what’s good enough – the best of the ordinary.”

… his future

Morrell was appointed in November 2009 on a two-year contract. There’s speculation over whether 
it will be renewed. He says: “I’d like another year – that would take me up to 65. But there is a process to go through and the appointment has to be made by the Treasury. I want to put something sustainable in place. If this Construction Strategy is not  working next year, it never will.”be .”

… his worst project

“The Galleria in Hatfield – probably the only project where I’d cross the road to avoid the client.”