UK could save £15 billion every year by lifting construction productivity

Last December, the UK government announced its new productivity programme which is expected to deliver savings of £15bn every year. The programme is called Transforming Infrastructure Performance (TIP). Its main objective is to boost construction productivity and revolutionise the UK building sector in terms of infrastructure investment.

Infrastructure investment refers both to social infrastructure (hospitals and schools) and economic infrastructure (energy networks and transport). The new £600bn infrastructure (public and private) investment pipeline is anticipated to optimise the construction process from start to finish.

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‘It is a ‘game changer’ and we need to recognise that it is here to stay. It also underlines the necessity to embrace digital solutions as the backbone of the future delivery of the construction industry. Transparency and accountability will drive this change and with the Government driving further initiatives in late 2017 to give certainty to investors that will in time boost industry confidence and bolster future investment’, highlights Jason Ruddle, construction expert and UK MD at LetsBuild.

TIP has a ten-year scope and will address the core issues that hinder efficiency and productivity in UK construction. In general, it is seen as a way for the sector to overcome its traditional problems and embrace new technologies in order to establish a more inclusive and transparent building process.

The key areas of focus

Construction technology can provide UK building sector with tremendous help when it comes to addressing and eventually solving its core issues. Simply put, it is a valuable asset for every construction stakeholder and it gradually transforms the relationship that construction companies have with information.

In a nutshell, here are the three main areas of interest that the new productivity programme is focusing on:

1. Prioritising the right projects

As reported by the National Audit Office (Department of Transport) and the LSE Growth Commission, economic infrastructure investment is a key factor in fiscal growth. By extension, economic growth can lead to an augmented demand for further infrastructure services. For that reason, it is crucial to focus on the right projects. In that manner, you will be able to take the most out of your investment. The smarter you invest the higher ROI you can hope for.

2. Optimising project delivery

When it comes to the contribution of construction to the British economy, the numbers are impressive:

• £370bn turnover for the wider building sector
• £138bn contributed to the nation’s economy
• 3.1M people employed in UK construction (9% of the whole workforce in the UK)

Nevertheless, there is still a significant productivity gap in construction compared to other industries. This challenging situation can lead to lower wages, increased cost and can harm the long-term development of the sector. Digital tools are the answer to the problem. They can open up the construction process, introduce stronger collaboration models and transform the supply chain.
As Jason Ruddle notices:

‘It is the right time for companies like LetsBuild to enter a market such as the UK, to underline the importance and necessity to collaboratively work together and use data through a common platform and approach to analysing in order for clients and contractors to improve cost control and overall profit margins.

3. Maximising ROI of infrastructure investment

Both in the UK and the rest of the world, societies are rapidly changing due to the constant increase in population and the significant impact that digital technologies have on our daily lives. The demand for improved infrastructure networks is also part of this substantial change.
Luckily, the advent of new technologies has made possible for the building sector to explore new and smarter ways to increase the efficiency of the structures as well as to pave the path for new, revolutionary pieces of infrastructure. Data-driven decision making and artificial intelligence are expected to play a decisive role in this effort.

Digital solutions as the backbone of the construction industry

By now, it becomes evident that digital technologies are already showing the way for a more efficient and collaborative building sector. That being said, digital adoption is a key factor for the future of the industry.

‘The use of digital tools is paramount to the future of the construction industry but the most important factor is the stronger ability to collaborate. There’s no question that this is seen as the backbone of improved delivery and maintenance on new and existing developments’, explains UK construction expert Jason Ruddle.

However, it is wrong to believe that there is only one solution or element which can transform construction. There are many different trends that have a serious effect on the industry and the way we build.
This is where digital adoption can play a fundamental role not only in the managing process but in learning from our past mistakes, as well. Such an approach can help us improve the industry’s culture and prevent costly mistakes before it’s too late. Like that, it will be able to minimise the cost and keep construction clients happy.
In short, some of the most noteworthy aspects of construction technology could be the following:

Collaborative project delivery

We already referred above to the importance of adopting a more collaborative approach in construction. Digital tools can make it easier for project agents to collaborate fast and more effectively. In other words, it can enable the collaboration between different disciplines within the construction process. Being able to share project information and updates in real-time is extremely powerful and it can boost productivity during the construction process.
On top of that, digital tools can establish solid communication between the different sides, while keeping everyone on the same page as the project progresses. In that sense, a more collaborative approach can be synonymous to improved and sustainable margins.

‘Industry key reports such as McKinsey clearly explain the need to communicate and align frequently as minor modifications to orders, resources, project planning could significantly increase timelines and costs if made late in the game so it’s vitally important for existing technology organisations to coordinate and work together with the new technology start-ups as it’s them who are seen as the disrupters due to the wider focus on gathering and sharing digital data across the teams’, underlines Jason Ruddle.

Internet of Things

IoT has a strong influence on the building sector and the job site in particular. It is no exaggeration to claim that IoT is changing every single aspect of the building sector and is transforming the way we connect within the industry.
Among others, IoT is expected to have a tremendous impact on the following areas:
-BIM
-Green building
-Modular construction
-Administration and management
-Smarter buildings (sensors, cloud connection)

Transparency and accountability

At the moment, there is an imminent demand for more transparency and accountability in construction. Digital tools can play an essential part in this effort. Staying on top of your project’s information and sharing the right data with the right people can drastically improve your project’s performance and establish a better connection between the office and the construction site.

Furthermore, by closely monitoring the project’s flow of information it becomes easier to follow everything that happens on the field. What is more, a detailed project progress record can save construction companies from a lot of trouble in case that any project disputes emerge.

A new type of workforce

The adoption of digital tools in construction is providing the sector with a unique opportunity of improving its profile and tackling the substantial skill and staff shortages that it is battling against.
The building sector can be seen as an appealing career choice for younger and technologically savvy workforce. In simple words, digital tools can be an excellent weapon in the effort to attract and retain talent in construction.

The future is built on a solid foundation

With the advent of the new productivity plan, UK construction is going through a critical change. The good news is that there is already a solid foundation to build on.
More specifically, UK has managed to create an inclusive business environment which can be extremely appealing to investors. According to the Nabarro LLP Infrastructure Index (2016), United Kingdom is ranking first when it comes to investment attraction.

There are two essential factors for this achievement. First of all, the establishment of regulations which embrace investments and create an investor-friendly environment has helped a lot. Secondly, the government has managed to optimise the delivery process and stray further from stop-start planning in regard to economic infrastructure.
Initiatives such as the National Infrastructure Plan of 2010, the National Infrastructure Delivery Plan 2016-2021 and the National Infrastructure Commission have contributed to the development of a long-term strategy which allows better capital allocation and planning.

How LetsBuild can help!

LetsBuild can be a driver of change for UK construction and can contribute to increasing transparency and accountability in the building sector.  Our software is founded on three strategic pillars that allow you take full control of your construction project. Empower collaboration between agents, detect where the problems are stemming from and use reliable data as the basis for your project decisions.

‘There is a real passion from the founders of LetsBuild to deliver improved margins through strong collaboration in the industry and by continuing the approach taken today in employing industry experienced personnel to take the next steps forward’, concludes Jason Ruddle UK Managing Director at LetsBuild.

The journey for a more efficient and data-driven construction industry has just begun and despite the challenges that might appear along the way we enter an era of remarkable opportunities in construction technology!