Morrell asks industry to cut costs by 10-30%

The government’s chief construction adviser Paul Morrell is calling for the construction industry to restructure and collaborate to cut project costs by 10- 30 per cent, according to Building magazine.

‘Low Carbon Construction’, the final report by the Innovation and Growth Team led by Morrell, recommended cutting costs in preparation for a move to a low carbon economy.

The former Davis Langdon QS launched the report this week at the Treasury alongside construction minister Mark Prisk, communities minister Andrew Stunell, and climate change minister Greg Barker. A formal response is expected from the government by next Easter

According to Building, the reshaping of the industry around more collaborative forms of working, previously addressed in reports by Sir John Egan and Andrew Wolstenholme, is at the heart of the recommendations. 

It also calls for the industry to “transform itself in accordance with a well-established agenda for integration” in order “to make the cost savings of 10-30% … holding out the prospect of delivering zero or close to zero-carbon buildings” at no extra cost.

This would be achieved by integrating the supply chain into the procurement process, and by more collaboration on bidding and design.

However, Construction News took a different slant, highlighting the report’s calls for the government to introduce fiscal incentives for action on low carbon and a series of mandatory requirements on construction companies to demonstrate energy efficiency.

The report stresses the need for greater legislation and government-led measures to encourage consumers, construction companies and clients to change their behaviour.

Building also reported that a group led by the Specialist Engineering Contractors Group (SECG) and another led by Constructing Excellence have proposed taking forward pilots of how a fully collaborative approach might work on publicly-funded schemes, in order to demonstrate potential cost savings.

Rudi Klein, director of the SECG, said: “The time has come for action on collaboration.

We’ve been talking for 12 years and we must start implementation. We’ve actually gone backwards on this in the last couple of years.”

But Building also reported scepticism over whether integration can deliver the 30% savings envisaged. Richard Steer, senior partner at QS Gleeds, said: “Putting the 30% target forward to the government is not helpful at all in the depths of recession. This is a political statement rather than a practical one.”

Morrell’s report includes no fewer than 65 recommendations. For more details of the  measures he believes are essential to low-carbon construction, see our separate story.