Rudi Klein is a barrister and former chief executive of the Specialist Engineering Contractors Group
It is extremely gratifying that the government has accepted the recommendation for a construction regulator, albeit implantation is delayed until 2028.
More than 30 years ago, as chief executive of the Specialist Engineering Contractors Group, we recommended that an Office for Construction should be established.
This was submitted to the joint government/industry inquiry into procurement and contracts headed by the late Sir Michael Latham.
“Radically changing the course of construction is often compared to turning round a massive oil tanker”
Unfortunately, Sir Michael did not take up the idea. We resubmitted the proposal to the then Business and Enterprise Select Committee in 2008. The committee’s response was that there should be a chief construction advisor.
This was taken up by the previous government and then the post was abolished.
Given that this was a recommendation in the Grenfell Inquiry report, the government will be reintroducing this post.
Over the past 30 years since Latham’s 1994 report, we have had numerous reports cataloguing the industry’s faults.
The Egan Rethinking Construction report in 1998 recommended a more integrated delivery process with genuine collaboration underpinning that process, spawning a “Movement for Innovation” that eventually petered out.
It seemed that the industry would not be distracted from its chosen path of non-collaboration, lowest price, risk-transfer and payment abuse, which were all exposed in the aftermath of the Carillion collapse in 2018 and in the Grenfell Tower Inquiry.
In his report in 2016 (commissioned by the Construction Leadership Council), Mark Farmer observed: “The construction industry is in dire need of change. What is clear to me following the nine months spent on conducting this review is that carrying on as we are is simply not an option.”
Farmer was ignored.
Radically changing the course of construction is often compared to turning round a massive oil tanker.
The industry has often been told that it must take on the task of transformation.
But an industry built on fragmented inputs cannot undertake this herculean challenge.
There has never been in place an effective and well-resourced driver to achieve this.
This is why, after all these years of fruitless initiatives, reviews and reports, we are on the verge of having a single regulator.
The government sees this regulator as a way of “effectively enforcing standards of culture and behaviour”.
In her 2018 report on building safety, Dame Judith Hackitt made much of poor behaviours in the industry, particularly in relation to poor procurement, contractual and payment practices.
There is much talk about improving collaboration in the industry.
But this remains talk as long as outdated procurement approaches are relied upon, especially the perpetuation of the divide between design and construction.
What should a construction regulator be doing?
No doubt the first port of call will be the National Audit Office’s 2021 guidance on effective regulation.
There are also models to call upon, such as the utilities regulator and, abroad, the statutory Building and Construction Authority in Singapore. It was set up in 1990 to modernise and transform the industry and has been very successful.
The themes underpinning their responsibilities primarily relate to driving up standards, promoting best practice and fair competition, and encouraging economic growth.
There should be three strands to the regulator’s authority:
- Oversight of existing industry regulation and standards (including absorption of responsibilities of the Building Safety Regulator). This should include introduction of a licensing scheme for all construction firms and their tradespeople.
- Enforcement of a code of ethics based on the Groceries Supply Code of Practice. The Groceries Code Adjudicator has statutory powers to fine large supermarkets mistreating their suppliers.
- Driving best-practice outcomes, especially in relation to procurement, contracts and payment
The construction regulator should report directly to Parliament and not, as currently proposed, to the secretary of state.
With the onset of a regulator we can dispose of the services – such as they are – of the so-called Construction Industry Leadership Council.
Finally, there should be a summit of all industry best practice advocates from Constructing Excellence, the Save Construction Initiative and the trade associations.
The role of the summit will be to put together a suggested list of responsibilities for the new regulator and devise a structure within which the regulator can most effectively discharge those responsibilities.
