James Speller responds to the Construction Playbook

At the end of 2020, a comprehensive approach to achieving the Government’s aims to ‘build back better, greener and faster’ in a post-COVID-19, post-Brexit landscape was outlined in the Construction Playbook – the new public-sector procurement guidelines published by the Cabinet Office. Three months on, Speller Metcalfe pre-construction director, James Speller, reflects on the guidance and the critical roles we all need to play in safeguarding the future of our industry.

The Playbook has been developed as a result of extensive collaboration from across the public and private sectors, bringing together realistic best practice ideas and approaches from a wide range of contractors and consultants, including – we are very proud to say – Speller Metcalfe’s own Rob Lashford, Regional Director (Wolverhampton). As a medium-sized, family-owned regional contractor, it was a significant opportunity to be able to input into such a landmark document – recognising our important work with leading new construction approaches such as Integrated Project Insurance – and demonstrates that viewpoints of a wide range of companies of all sizes and scales have been considered in its development, rather than just being the result of consultation with a select few of the biggest Tier Ones.

The Playbook outlines what should happen throughout all stages of the procurement process – from planning and preparation through to contract implementation. It contains a number of key policies which, as of December 2020, are mandatory for all central government and arms-length bodies, with the wider public sector also strongly encouraged to follow suit. Although the guidance is written for the public sector, it promotes collaboration across the whole industry and everyone involved in procurement – including the private sector – is encouraged to follow the best practice it promotes.

An element which crosses all areas of the Playbook is the idea of early engagement. A simple concept; with proper planning, collaboration and consultation from the very earliest opportunity, we can collectively reduce waste, and save time and money – and maybe even make some money too! Unfortunately, it so rarely happens this way. It’s long been said that the existing contracting model is broken – that the ways in which the industry typically does business results in buildings costing more money, time and carbon than they need to – whilst only delivering wafer-thin returns for contractors. Refreshingly, the Playbook acknowledges that margins in the industry are far too low and that construction needs to be more profitable – a sentiment which I’m sure the whole industry welcomes.

Early publication of pipelines is a key playbook policy which we believe is vital in ensuring quality, properly considered bids, whilst also providing the supply chain with certainty of opportunity. Recent experience has shown us (on frameworks especially) that competition between providers sometimes leads to future pipelines being shrouded in secrecy, under the concern that contractors will steal opportunities away to ‘rival’ frameworks. We only hope the Playbook’s enforced visibility of future public sector work will encourage more collaborative approaches to pipeline sharing in the future.

The Playbook also endorses the benefits of alliancing models versus traditional procurement approaches. As Speller Metcalfe has just reached completion of the country’s second IPI trial project – the redevelopment of Derby Silk Mill – the Playbook acknowledges that ‘the effective alignment of commercial objectives is likely to improve intended outcomes as well as drive better value for money’ – and goes on to highlight how alliancing contracts promote more effective integration and enable earlier and improved engagement with the supply chain. With three IPI projects now under our belt (Advance II, Derby Silk Mill and IOT) we have certainly seen these benefits of true collaborative working first-hand and welcome the continued endorsement of such approaches. Frameworks rightly continue to be promoted as efficient tools for public sector procurement, however the Playbook warns that the landscape of current government frameworks may be slimmed down to reduce on administration and costs and reviews are already underway within government as to how this might happen.

As in previous such guidance, the importance of BIM and digital is heavily emphasised in the Playbook – and understandably so. We’ve been delivering BIM Level 2 projects since 2012 – long before its use became mandatory on all public sector works in 2016 – however even now we still find the percentage of contracts it is enforced on to be low. It would seem a lot more still needs to be done to better educate procurement departments and the wider industry on the benefits of BIM to ensure take-up moves in line with the Playbook’s aspirations.

Whilst there are some limitations to the content of the Playbook (for example, health and safety, carbon reduction and social value are rightly highlighted as important topics to be considered in procurement, but there is no space given to equality and diversity), it does have real potential to be a catalyst for positive change in the industry – but only if it’s properly used and applied. The real scope of application is narrow – the rules only apply to central government – and the wider public sector (local councils, schools, emergency services, NHS Trusts etc.) are merely encouraged to follow the best practice it promotes, meaning a ‘leading by example’ approach is being relied on for wider take up. How widely this happens remains to be seen, but it is a start, and we are hopeful that many will follow suit.

Whatever your role in the industry, there are two key things we can all do to support the Playbook’s successful implementation and try and drive its principles across the wider industry. We need to challenge and to lead by example. If we see procurement practices which aren’t up to scratch, we need to not be afraid to hold procurement teams to account and to ask why – and in return, we all need to make sure we are applying the same guidelines ourselves. The only way that we will see fundamental change is in ensuring the ideas of the Playbook are adopted up and down the supply chain, with all involved applying its principles within their own procurement.

In the five years since Mark Farmer’s stark ‘Modernise or Die’ warning, it seems the industry is still seeing more companies meet their demise than ever before. According to the Insolvency Service, UK construction has had the highest level of insolvencies of any sector in almost every quarter since Q1 2018, and in the 12 months to Q4 2019 a huge 3198 construction companies went out of business – and that’s before things were complicated by a global pandemic…

With this sustained trend of industry failures and the ongoing battles ahead, if things don’t start to change now is it unrealistic to imagine in 20 years’ time a construction industry landscape that only holds a place for the largest national contractors who were able to weather the storm?

With a target period of three years to implement across public sector procurement, we all now have a part to play in ensuring the critical industry transformation finally starts to gain momentum, and that the well-intentioned Playbook doesn’t get left on a shelf to gather dust whilst more and more contractors continue to go to the wall.