Sir James Wates

Perspectives

Construction can learn lessons from coronavirus crisis

30 March 2020 | By Sir James Wates | 0 Comments

At the time of writing, the construction sector is, along with the rest of the UK, grappling with a global crisis caused by the coronavirus.

Because of the nature of our work, we are well prepared to deal with many health and safety challenges, but the demands we are facing now are unprecedented. While we don’t know the full scale or duration of this crisis, I am hopeful that when the dust has settled, we will have learned valuable lessons.

The crisis has forced many of us, myself included, to work from home or otherwise be more flexible. In a very positive way, we are re-examining how we work, and asking ourselves how things can be done better. After we pull through this difficult time, those learnings should stand us in good stead for tackling longer-term challenges, including our efforts towards achieving zero-carbon emissions.

The crisis has pushed us to communicate more and faster, and I hope that we will continue to share information in a very collaborative way long after the crisis has gone.

Our professional bodies, and trade organisations, have been delivering clear messages to government (in spite of some unclear messages from government), and the government is taking action in a completely unprecedented way. Some of their measures will directly meet our sector’s needs – for example, the Cabinet Office’s directive for public sector clients to continue making contract payments even where delivery may be impaired by coronavirus-response restrictions. And the definition of ‘key workers’ includes many in our sector, such as those required to keep transport, infrastructure and utility networks operational.

SME concerns

Much still needs to be clarified by the government, and there are significant concerns about how SMEs can access financial support and what the public sector pipeline will include post-crisis. Nonetheless, these central government commitments will be essential for the many companies in our sector that are operating on thin margins.

There is a lot at stake during this crisis, and the CIOB’s report published at the end of February – The Real Face of Construction 2020: a socio-economic analysis of the true value of the built environment – was a reminder to government of why the construction sector is so important to the UK’s economy, encouraging government to see construction in its broader sense, which would mean that we represent around 10% of the UK’s Gross Value Added.

Coming shortly before the escalation of the coronavirus crisis, that report was well timed. I have no doubt that it has strengthened our hand in representing to government our specific asks for ensuring that the crisis response keeps our sector’s long-term health in mind.

We know that in the longer term, the construction sector has to change its business model, managing risk better so that it is not so vulnerable to shocks such as the pandemic. The fact that risk management is a lynchpin for so much of what ails the construction sector was well mapped out in the CBI’s recent report, Fine Margins

That report reminds us of some key principles to guide us in the change we know is essential, such as a focus on profitability not turnover, and the value of a collaborative mindset from the start of contractual relationships.

The CBI report also helpfully draws on data provided by Oxford Economics in demonstrating that for every £1 invested in construction, we are delivering nearly £3 in value to the economy. As with the CIOB report, the CBI’s representations to government were – as it turned out – particularly well timed for ensuring that construction’s needs are reflected in the coronavirus response.

We are economic multipliers. This impact should be our mantra in all communications, in this time of crisis and beyond.

Our businesses, our country, our world are all in a real fight. So let’s keep up the team spirit, share good practice across the sector, and look after each other as well as those less fortunate than ourselves, and I know we can pull through this together.

  • Sir James Wates is chairman of the Wates Group and a past president of the CIOB.