Sam Stacey is chair of SustainCRE and chief executive of Stacx International
For four years from 2018, I led the transforming construction challenge (TCC) – a UK Research & Innovation-backed initiative that was match funded by industry to encourage the shift towards manufacturing and digital processes. It set out to champion the sector’s innovators – the people and organisations bringing us more sustainable and affordable buildings at greater speed. Progress on these fronts has been respectable, but to claim it as transformative would be premature. However, the new landscape of political stability and attention to climate change offers the potential for spectacular further headway.
“Efficiencies on the supply side could bring profit margins in double digits”
Our new Labour government has, very publicly, promised 1.5 million new homes over the next five years, plus substantial progress in decarbonising the economy. These new communities will require social infrastructure. Those who are prepared to be pioneers in construction have an opportunity to step up, driving economic growth in the sector and the nation.
It is the ‘respectable’ results of the TCC that have largely paved the path towards this bright future. Through our programme, nine out of 10 TCC participants have increased their levels of collaboration; and 85 per cent of public and private sector clients are requesting TCC concepts in procurement. In addition, match funding has increased, to reach £790m by 2027. Meanwhile, 92 per cent of firms adopting TCC concepts have reported an increase in annual revenue. The UK’s construction-related exports have increased by 14 per cent per annum, too.
A model fit for our age
One great pioneer from the Victorian period of industrialisation is Thomas Brassey. He is something of a Stacey family icon – I am his three times-great grandson! By the time of his death in 1870, Brassey had constructed one in every 20 miles of railway in the world, as well as docks, mines, water supply and sewage systems. To achieve this, he built new factories and manufactured the components needed, worked in partnership with other contractors, used local labour and paid good wages. Success was founded on innovative technology, vertical integration of trades and inspirational leadership. Today’s opportunities are different to Brassey’s era, but many of the lessons are equally applicable. So what might the model for British success look like now?
Today’s pioneers will be using the pillars upon which the TCC was founded, examples of which are provided among our 96 published case stories. Perhaps the best opportunity lies in standardising the energy-performance upgrade of the western world’s 400 million existing buildings: kit-of-parts solutions to suit a taxonomy of different building types. This would offer the scale and running-cost savings to support the project business cases.
Several British firms are well placed to capture this market. With the right approach, customers could be provided with unprecedented levels of affordability, convenience and building performance. Efficiencies on the supply side, with substantially more frugal use of labour, materials and energy, could bring profit margins in double digits.
Government support will be essential to drive this change. The previous government supported the TCC with cash and procurement levers. The current government will need to ensure clear and enforced regulation, as well as secure demand pipelines, while funding facilitation and support for skills. Its recently announced planning reforms are a welcome contribution. In return, the government will be rewarded with the creation of high-value jobs and savings in the capital and operating costs of the public estate.
The period following the completion of the TCC presented the industry with unfortunate impediments, including high interest rates and political turmoil. We now stand at a point where we can realistically plan for five to 10 years. If we grasp this opportunity, our construction pioneers could be showing strong growth within the next two years. If not, homes will remain unbuilt, energy will be scarce, and we’ll watch other nations beat us in the race to benefit from a transformed construction sector. The choice is ours.