Top 10 steps for post-COVID recovery
Mace has published The New Normal - How we level up in a post-COVID world, outlining the key issues that need to be tackled to improve the quality of life, deliver sustainable national economic growth, and help ‘build back better’. Although the report is UK specific, many of the topics will be applicable to European and global markets. Here is the report's top 10 recommendations:
10: Invest in digital and physical connectivity infrastructure...
Unfortunately, as long as there is such a fundamental inequality in access to digital connectivity and physical connectivity between areas in the UK, ‘levelling up’ will be exceptionally challenging. By investing in both low carbon transport schemes and improved digital connectivity in the regions that need them most, the UK Government can significantly improve the economic productivity of the North and the Midlands. The new UK Infrastructure Bank will have a key role to play in facilitating joint private and public sector funding to drive infrastructure delivery.
09: Green Book reform...
For a number of years there have been concerns about how the UK’s Green Book appraisal process is being implemented, disadvantaging areas which are economically weaker. Appraisal measures around broader social value and outcomes in the Green Book are not being used effectively.
Recent proposed changes to address issues will be helpful, but far more clarity is needed about the specific objectives of ‘levelling up’ and how these should impact decision-making. The additional support promised in the recent review must be introduced at pace to ensure outcomes improve as quickly as possible.
08: Delivery of a national retrofit programme...
Alongside revolutionising how we build, we must recognise that there is a huge opportunity for sustainable growth and skills investment as we look to achieve the UK’s net zero ambitions. By delivering an ambitious national retrofit programme to address the carbon emissions of the UK’s existing housing stock – and by investing training and skills in the right areas – up to 500,000 new jobs and billions of pounds of growth in the regions can be created.
If we do not invest appropriately, homeowners will be stranded in housing that they will not be able to sell in future as they won’t meet emission requirements. By delivering an ambitious national retrofit programme to address the carbon emissions of the UK’s existing housing stock – and by investing training and skills in the right areas – we can create new jobs and investment.
07: Reward innovation...
When procuring projects and creating contractual relationships, innovations must not only be encouraged but rewarded. At bid stage, a dedicated innovation funding pot could be created so that the best elements of all bids can be incorporated into the solution with unsuccessful bidders rewarded for their contributions.
Similarly, contracts must reward successful partners who deliver projects earlier than expected or with better outcomes than envisaged. Sometimes contracts can result in perverse incentives whereby it is more commercially advantageous not to deploy innovations; this must be avoided if the UK is to level up and build back better.
06: Revolutionise procurement...
The Green Paper on reforming public procurement and the Construction Playbook make many welcome suggestions on how to improve the way the UK procures large and complex projects now that it has left the EU.
Those important principles include moving to a focus on outcomes, the possibility of a tribunal service, a fair split of risk and reward and the assessment of how bidders contribute to the “public good” - including levelling up as well as innovation and reaching net zero carbon.
05: R&D funding in construction...
Around £37.1bn was spent by UK taxpayers or non-profit organisations on R&D in 2018 with 22 percent on health (predominantly pharmaceuticals) and 15 percent on defence - and only 7 percent on 'transport, telecoms and other infrastructure', which includes construction.
As the Government looks to increase its R&D spending from 1.7-2.4 percent by 2027, we need to break from the past and ensure the industry receives its fair share and recognition for the important role it will play in future.
04: Focus on 'shovel worthy' rather than 'shovel ready' schemes...
Infrastructure investment is broadly accepted as a good way to help stimulate economic growth and job creation. However, it is important to remember that not all schemes are created equal and some will deliver greater benefits than others.
Instead of progressing the schemes which are most ‘shovel ready’ we instead should focus on those which are ‘shovel worthy’ and are likely to deliver the greatest benefits and outcomes for our post-COVID world. We should particularly focus on homes, hospitals and schools, all of which unlock huge benefits for local communities.
03: A reskilling programme...
Unfortunately, the economic impacts of the pandemic will likely see people losing their jobs and unemployment rising. This will not happen evenly around the country with some areas, particularly outside the South East, likely to be more severely impacted.
This presents an opportunity to help address the construction skills challenge and upskill/retrain those who have sadly fallen on hard times through targeted MMC training programmes so that they can play a full part in the delivery of the UK’s substantial infrastructure and construction pipeline.
02: Regionalised MMC...
A Modern Methods of Construction (MMC) approach which heavily uses a manufacturing and offsite approach has many benefits including better quality, contribution to achieving Net Zero Carbon and more resilience in delivery. Importantly it can make a major contribution to levelling-up.
Many areas with high levels of deprivation are areas which have gone through de-industrialisation and loss of manufacturing jobs. Construction manufacturing hubs (like those outlined earlier) can tap into that heritage and skills base to deliver schemes right around the UK while reducing unemployment and creating well paid jobs.
01: Target investment in worst hit areas...
Many of the UK’s most deprived areas could face further long term economic scarring from the impact of the pandemic. The Government’s proposed Levelling Up fund is a good start, but funding must be directed towards those areas most severely affected by the pandemic so they can invest in transport and social infrastructure, retrain, upskill and to support inward investment from the private sector in concepts such as construction manufacturing hubs.
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