Constructing Excellence has had an uncertain time after the Government pulled its funding last year. Richard Stirling catches up with chief executive Don Ward in the organisation's first year on its own.

IT seems like a contradiction for Constructing Excellence (CE) to talk about integration just when its links to the Government are becoming weaker and it faces a future without guaranteed public sector funding, but chief executive Don Ward says this will be key to the organisation’s success.

CE’s message of collaborative working and partnerships have become all the more poignant since the then Department of Trade and Industry (DTI) withdrew its support and left CE to work out how it was going to stand on its own two feet.

If anything, Ward says, the withdrawal of ready cash has brought CE closer to the construction industry and encouraged closer working relationships.

“What we do has changed drastically over the last few years,” he says. “DTI grants ended last March, so we’ve been without funding for the last year. It tapered off fairly sharply although we still win some government funding.

“Through our regional structure we get funding from the Regional Development Agencies, which has taken over from the central government funding. Now our most important source of funding is from membership.”

CE has approximately 260 members who pay between £3,500 and £10,000 a year to be part of the organisation. In return, they benefit from research, benchmarking, training and guidance.

“A lot of people thought we would disappear as soon as the funding ended,” says Ward. “We’re growing about one new member every two weeks.”

He says events management is also a stream of revenue for CE. “There are a lot of events and a lot of those are exclusive to those people prepared to pay for them.”

The organisation also has some income from consultancy work it does for clients such as Network Rail, housing association Riverside and Goldsmiths college.

Supply chain matters
CE’s message to the construction industry is to create greater efficiencies by getting the supply chain to work together.

“There’s a lot of integration at first tier level,” Ward says. “And a lot of suppliers know they have to work collaboratively with their contractor, but it’s a slog for contractors to pass this down the chain.”

Ward deplores the recent cases of subbybashing by housebuilders imposing price predictions on their suppliers. Instead, he says, the main contractors should have adopted a much more transparent approach. “We can do it if we do it the open book way,” he says, “but the way housebuilders like Taylor Wimpey did it was frightening. Intelligent and collaborative working is our bread and butter.”

Counting the cost
Ward says the construction industry should move away from counting cost as the bottom line for all projects. Instead, it should pay closer attention to what its clients actually need and deliver buildings that reflect this.

“The most exciting work at the moment is in value,” he says. “The idea of value starts with the question: why does the construction industry exist? The answer is that clients are trying to buy the use of a facility. In education, this would be better learning facilities and in healthcare it would be better hospitals.

“Our industry has a bad understanding of what the client wants. We should understand better what makes a good school or a good hospital, office, hotel, leisure centre or what makes a good road. The more we understand that the more the design process is integrated into the life of the building.”

The current process of procuring buildings is the wrong way round, Ward says. Architects design buildings to suit their own standards and contractors then build them within the constraints of cost and time agreed with the client.

The process should start with the parties considering what the purpose of the building is and how it is going to be used during its occupancy. We should move away from thinking about contractors handing the finished product over to clients and think about construction as an operation in the procurement process.

“The problem with the term ‘construction’ is it’s a process,” Ward says. “It’s something we do before we go into the building. We should be looking at the built environment as the product.”

He says that other parts of the construction process add greater value to the finished product.

“It’s the design briefing process that creates that value,” he says. “Straight away we’re into the design process and talking about how buildings should look, without talking to the client about what they might want from the building over the next 30 years. Facilities management has as much a role as architecture.

“The more professional the industry gets and questions its traditional assumptions, the better the construction and facilities management processes will be.”

When the construction industry understands it is delivering a service as part of a long procurement process, it will be able to command the appropriate payment and change its current litigious ways, Ward says. “We are in the only industry that seems to think the way to make money is to sue the client.”

As the largest client for the construction industry, local government has a large part to play in the way the sector behaves. Ward says he has seen a notable shift in their way of procuring contractors. “There’s too much bleating about how nothing has changed over the last 10 years,” he says. “Overall, I’m quite impressed about how Local Authorities have changed and moved away from lowest price tendering. They are critical of the process now. Local Authorities are the client whether you’re building housing, schools or roads. If you can get them to change, the average small builder will have to wake up.”

Lessons from the past
Ward says that in his experience, when the construction process is focussed on value rather than cost, it creates a more greener and leaner industry. “I worked for 10 years on housing for the Building Research Establishment and although we didn’t know it then, the work was on sustainability. The right thing for the planet is also the right thing economically and socially.”

One area in which economics, efficiency and the environment come together with astonishing ease is logistics. Ward says he is amazed by the statistic that one-quarter of all vehicle movements are made for the construction industry.

He adds CE is working with the Olympic Development Authority to create a landmark construction project in which 50% of its materials will be delivered by rail or water.

“We have done a fair bit of work with them, using the Olympics to demonstrate that UK industry can be world class,” Ward says. “From our point of view they’re doing all the right things as a client. They have done all the planning work they should have so that when they go onsite, they will know exactly what they should be doing. They’re even involved with the supply chain and local residents – they’ve done all the common sense things.”

Increasingly tough environmental regulations, such as the Code for Sustainable Homes, will force contractors to work more closely with their clients, says Ward. This will be especially apparent in the increasingly diverse and complex projects demanded by property developers.

“The area which is going to be most interesting in the housing market is going to be mixed use developments,” he says. “We’ve got a new breed of partnership involved where housebuilders are working with commercial developers.”

If the housebuilders find themselves unable to deliver homes up to the standards demanded under new legislation, it will be through a lethargic attitude, rather than the Government setting the bar too high for industry, Ward says.

“The housing industry has only itself to blame; it has been given enough time to get round the new regulations. We were proving in the 1980s that we can build houses to today’s standards at no extra cost. There’s no excuse for not building to Level 5 of the Code for Sustainable Homes.”

If the withdrawal of Government funding from CE has forced the organisation to think about working more closely with the industry, then legislation and trends within construction will force companies to also think about close working and greater integration in the supply chain. Contractors may have to change traditional adversarial ways of working with their suppliers to find efficient ways around environmental standards and economic conditions.

As an organisation that can cement the industry together, it looks like CE might have rescued confidence from uncertainty to lead the industry forwards.

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