UK Government Support Can Catapult Engineering Construction Sector Reputation

The UK’s engineering construction industry has great opportunities if it can improve its productivity and industrial relations according to an independent review report entitled Changing to Compete, out today.

Mark Gibson, Chief Executive of the Whitehall and Industry Group (WIG) and his Review team described the opportunities for the engineering construction industry to grow over the next 10-15 years.

These will stem from the anticipated increased investment in nuclear and other power generation, carbon capture and storage, biofuels and other low carbon technologies in the UK.

The current stock of plant in these sectors and in oil and gas and chemicals will also continue to need investment for repair, maintenance and upgrading.

To make the most of these opportunities will need a concerted response by the industry, with Government support. For example, the Review found that the productivity between UK projects was very variable. There was a large gap between the best and worst performing projects (+/- 30%). This was much greater than the productivity gap between the UK and other countries, for example the US Gulf Coast where projects were 11% more productive than similar projects in the UK.

The Review also found that recent unofficial disputes have lowered productivity and damaged the reputation of the UK industry

Mr Gibson said:

“I was asked to carry out this review by Lord Mandelson, the Secretary of State for Business, Innovation and Skills, shortly before I joined WIG in March 2009.

“This is a very important sector of UK industry, vital to the building of our future national infrastructure and to our move to a low carbon economy.

“My report is a thorough and independent piece of analysis which I hope can contribute to its success going forward. I have tried to make the review a practical and constructive process, engaging with as many in the industry as possible and visiting sites in the UK, France, Germany and the United States.

“I have produced recommendations for change based on this consultation and am delighted that there has been agreement on many of my proposals.

“One is for the setting up of a Forum involving clients, contractors and trade unions to oversee implementation of the recommendations.  I am delighted that Ian Marchant, Chief Executive of Scottish and Southern Electricity, has agreed to chair the Forum.  I wish Ian every success and will of course be available should my assistance be required.”

The Review found that where a project under-performed in productivity terms compared to the average in the UK or to other countries, this was likely to be due to the way in which the project was managed.

Although clients and contractors knew about good practice in project management, they did not always use it.  The Review recommends an increased focus on using and sharing knowledge about good practice.

 Clients and contractors should talk to each other about this more than they currently do and should look outside the industry to learn from others such as automotive and aerospace.

The Review found that the UK industry is highly skilled. A UK engineering construction welder, for example, is likely to be as skilled as one anywhere in the world. This reflects long term investment in quality training by the industry.

However, the Review recommends that employers and Government need to invest more in training if the industry is to address the projected large shortfall in numbers of skilled people in the future. In particular more funding is needed for apprenticeships (the average age of the current workforce is over 50).

The Review has found no evidence of deliberate mis-application of the national rules on pay and conditions or evidence of foreign contractors undercutting UK ones on price or skill levels. In some cases, projects have benefited from the use of foreign contractors and labour.

Poor industrial relations in recent years are due to a breakdown in trust between employers and employees, the Review found.

 So-called “un-procedural actions” which damage productivity are one manifestation of this. The Review concludes that employers and employees need to work harder on effective engagement with one another.

Topics: apprenticeships, Britain, employees, employers, engineering construction industry, France, funding, gas, Germany, Governance, government, Lord Mandelson, maintenance, oil, productivity, repair, skilled people, technology, UK, United States, upgrading, US Gulf Coast, WIG

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