Interview: David Hancock, Head of Construction at the Cabinet Office

David Hancock joined the Cabinet Office as Head of Construction for the Government Construction Team from Transport for London (TfL) in October. Interview by Antony Oliver.

Antony Oliver
05 March 2015

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How do you describe what you do?

Firstly I have to deliver the Government’s Construction Strategy which is aligned to the Construction 2025 vision for industry. The other part of the role is upskilling government in construction and helping it to be a better, more intelligent or informed client. 

How do you do that? 

There is a government reform strategy going and part of that process is training the project profession. Once upon a time government was all about policy – now is has a stream which is all about project delivery. And with the quantum of projects going on across government you might ask why haven’t we had that before. 

We stand at a fork in the road – we either collaborate long term and change the industry or we will go back 20 years to adversarial practices and low profit margins. Which one do you want? We are in charge of our own destiny.

So how will government client teams change?

We won’t have all the skills but we will be an intelligent client that knows what skills it needs to have around it.

How did your time at TfL prepare you for this role?

After the collapse of Metronet, TfL had to move rapidly from being arbiters to suddenly becoming a delivery organisation. TfL was probably a bit of a “thicker” client because we had to take in the whole of Metronet – we are certainly not going to absorb the whole private sector in construction – but we had to get up to speed very fast about the sponsor’s role. 

How does this intelligent client role compare to BAA when you were working on Terminal 5?

I think [as a client] T5 was before its time. With delivery you have to understand the criteria that surrounds the project and the T5 model would not fit everything we do in government and it wasn’t perfect for everything in industry. But a lot of what learnt on T5 we could take into T2 and repeat it. 

So looking back was T5 a success?

We were always criticised on T5 that we overpaid. And while we had nothing really to compare it with but we felt we struck a hard bargain. But now T2 is over we can show from the numbers that is was a good price – T5 was £3811 /m2 whereas T2 was £3780 / m2 - that is how close it was. Both are value for money.

The economic upswing means that the profit margins could be greater elsewhere. If we are not careful industry could opt to work for the private sector.

So how do you try to replicate this client role in government? 

There are no easy wins now – it is all about hard work and driving forward. We know that the whole industry has to make a step change in performance. 

Does the economic upturn make it easier or harder?

I think is makes it harder because industry can walk away from us. The economic upswing means that the profit margins could be greater elsewhere. If we are not careful industry could opt to work for the private sector.

How do you ensure that doesn’t happen

It is back to collaboration. We can offer the bigger profit margins so we have to reduce the risk and give work over a longer period – the Highways Agency’s five year settlement is an example of this pipeline and continuity of work. It is almost a call to arms for the industry - saying “you asked for a pipeline and for project banks accounts etc – now your part of the bargain is to deliver on your promises”.

Do you have a sense that the industry is ready to make the necessary change?

We stand at a fork in the road – we either collaborate long term and change the industry or we will go back 20 years to adversarial practices and low profit margins. Which one do you want? We are in charge of our own destiny.

How do you move beyond the early adopters to influence the whole supply chain?

It is about getting out there and pressing the flesh – real dialogue and that means time and effort. But just like at T5 you start at the top. Integrated teams with early contractor involvement and risk where it is best managed. 

Do we need more contracts like the T5 Agreement?

The T5 agreement was a behavioural contract. At the time people were spending more on lawyers’ fees than delivering the project and we never want to go back to that situation. We now have an alternative world and nobody wants to go back to that.

Do we need more mandates?

The trouble with that is that in a rising market people can just say “sorry I don’t want to play”.  Part of the Major Projects Leadership Academy is the train people to understand what they are asking for rather than just thumping a contract down on the table.  It is about sharing risk and reward.

Is your focus just on big wins from major project leadership?

No. While you can never take your eye off major projects, we also have a pipeline of smaller projects and our new Project Leadership Programme is out to tender now. We went to the big projects first of course, but now we are moving down. The smaller project managers today will be the major project managers of the future.

Skills is the big issue – what are your challenges

One of things we are trying to do is to get people to look at their own skills and say where are their gaps and how can we fill them. For years we have avoided half of the population – and we should be attracting the bright young things out of university. We have got a massive branding issue to tackle here to demonstrate that the industry is not just about standing in muddy holes.

Is your focus simply on new build projects and capital spending?

Certainly a lot of our focus is around Capex but the fact is that the potential savings are far greater around Opex.  So we have to start working outside our tradition boundaries – we have to change to focus towards whole life costs.

What do you see as key to changing the industry for the better? 

It is all about education and exposing people to new experiences. At the end of the day we need people who have the scars because without failure there is no learning. T5 would not have done what it did without the Heathrow Express collapse. 

What is your biggest scar?

Copenhagen Metro – the project was 30% over budget and it took 10 years to reconcile. But of course in the end it was a success. 

What are the key learnings coming out of the on-going procurement case studies?

Early contractor involvement, talk to and understand your supply chain, collaboration. Looking at different types of solution so that we get away from one size fits all. 

Is Sir John Armitt’s Infrastructure Planning Commission a good idea?

Without a doubt there are bits of it that are good. But it is a difficult one as you can never take away politics from infrastructure. The strength of the [current] system is that quite often being able to change your mind is a good thing and that has to come from strong political leadership. You need people who have a passion and really I don’t think that government intervention is wrong.