18 Oct 2024

Labour Government are keen to undertake infrastructure works during their 5 year term. Problem is delivery. Here is a summary of the key points from the National Infrastructure Commission report into UK construction, from a quantity surveying perspective:

  1. Cost challenges: The report highlights that infrastructure costs in the UK are too high and have been for decades. There are opportunities to reduce outturn costs by 10-25% across a portfolio of enhancement projects.
  2. Early stage focus: Over 50% of available cost reductions require action before delivery stages. Getting projects right in early phases is critical to prevent cost increases later.
  3. Key cost drivers:
  • Lack of clear strategic direction and long-term funding
  • Client and sponsorship challenges (e.g. overlapping roles, skills shortages)
  • Inefficient consenting and compliance processes
  • Constrained and fragmented supply chain
  1. Client capability: The report emphasizes the importance of effective clients in managing project risks, trade-offs, and procurement. Public sector faces challenges in recruiting and retaining staff with appropriate expertise.
  2. Procurement: Clients need skills to understand the market, structure contracts effectively, and navigate risk allocation. Misunderstandings in procurement can drive up costs.
  3. Supply chain: The UK construction sector is highly fragmented compared to international peers. This can create inefficiencies and additional risks.
  4. Productivity: Labor productivity in construction has stagnated over the last 15 years. Lack of a clear project pipeline reduces incentives for firms to invest in productivity improvements.
  5. Standards and compliance: While effective standards can promote efficient delivery, rapidly changing or unclear standards can add significant costs to projects.
  6. Planning and consenting: Delays and uncertainties in the planning system are adding costs to projects, both directly and through risk-averse behaviors.
  7. Opportunities for improvement: The report suggests that addressing these systemic issues could lead to significant cost savings across infrastructure projects.

From a QS perspective, this report underscores the need for early involvement in projects, strong cost management throughout the project lifecycle, and a systemic approach to addressing cost drivers in infrastructure delivery.