The recent publication of the Farmer Review has sent the media into a spin, with many headlines grabbing onto the catchy soundbite ‘modernise or die’. Despite the very realistic threats facing UK construction, it’s worth remembering that the world’s most ancient of industries isn’t about to vanish overnight.
What the review has highlighted is that if the construction industry is to ever reach its pre-recession height once again, drastic changes are necessary. As such, the Farmer Review is being held up as a symbol of hope for many firms, with the independent advice contained within having the potential to re-coordinate efforts. It undeniably makes for hopeful reading.
What is the Farmer Review?
In February 2016, Mark Farmer – founder and chief executive of Cast Consultancy – was tasked by the government (via the Construction Leadership Council) to identify solutions to construction’s most prominent woes. It’s no secret that over the last few years, firms have been faced with falling margins, flailing productivity and fragmentation, and this review was to shine a light on how to curb construction’s descent.
In its final form, the review is an 80-page document outlining 10 recommendations based on specific ‘industry symptoms’. Farmer identified – and focused on – the following industry symptoms:
- Low Productivity
- Low Predictability
- Structural Fragmentation
- Leadership Fragmentation
- Low Margins, Adversarial Pricing Models & Financial Fragility
- A Dysfunctional Training, Funding & Delivery Model
- Workforce Size & Demographics
- Lack of Collaboration & Improvement Culture
- Lack of R&D & Investment in Innovation
- Poor Industry Image
Analysing the Findings
For many in construction, these pain points will definitely seem familiar, and most have been touched upon in our own Construction Roundtable. In some ways it is worrying that the industry has already clearly identified these issues, but not yet acted upon them. Perhaps a lack of coordination is to blame (or collaboration, as featured on the list).
‘Modernise or Die’
Drawing a conclusion to his findings, Farmer wrote that the industry must ‘modernise or die’. It’s unlikely that construction will die out completely, but this statement has become a sobering reminder that even the most ubiquitous of industries needs to be nurtured.
Supporting this recommendation, Farmer highlights several areas where the industry could innovate and modernise in order to improve areas such as skills, training, and productivity. These are perhaps the most interesting elements of the review because they address two of the biggest issues that cross multiple sectors: productivity and the skills gap.
A Change in Priorities
In his review, Farmer makes it very clear that house builders – with the government’s support – need to shift their focus away from building for sale, and instead look at building to rent. This change in priority comes as a reaction to a greater demand for rental properties, and also marks a positive turn for the public, as well as the industry.
But changing priorities doesn’t stop at build-to-rent. Taking examples such as Legal & General’s new Sherburn factory and GlaxoSmithKline’s ‘factory in a box’, Farmer proposes that firms use pre-fabricated components to cut down on construction time and automate processes for faster and more efficient turnaround.
“If you buy a new car, you expect it to have been built in a factory to exacting standards, to be delivered on time, to an agreed price and to a predetermined quality. This needs to happen more in construction.” Mark Farmer, Cast Consultancy
Closing the Skills Gap
Due to a drop off in experienced workers during the 2008 recession, many industries are dealing with an ever-widening skills gap. As we previously reported, the government’s new apprenticeship levy will soon come into force in order to target the gap with greater training opportunities, but what about construction-specific solutions?
In Farmer’s eyes, the heart of the solution lies in a CITB fit for the 21st century. Part of this revamp would see a reorganised grant funding model for skills and training aligned to a future modernised industry. Perhaps by employing this new CITB structure alongside the apprenticeship levy, construction firms could sponsor a new workforce – and if used in line with automated processes, the need for skilled workers should hopefully decrease over time. Of course at this stage, it’s all purely speculation.
Arming the Industry
The UK construction industry stands at an exciting crossroads. As recommended by the review, it’s thought that the Construction Leadership Council will action the review’s suggestions. As ever, we’re hopeful!
Our next Construction Roundtable is happening on the 13th December at The Albert Square Chop House, Manchester. It will be followed by Christmas drinks and canapés. To secure your seat at the table please email email@example.com