We can’t lose Construction Sector Deal momentum, ACE chief tells MPs

In the latest evidence gathering mission by MPs, the chief executive of the Association for Consultancy and Engineering (ACE) Hannah Vickers warned about losing the “good will” and “momentum” surrounding the government’s Construction Sector Deal as questions on progress were brought to the table.

Vickers was part of a panel of industry leaders invited to provide oral evidence to the BEIS select committee on the Industrial Strategy, sector deals and issues surrounding productivity.

The session also specifically focused on the £420m Construction Sector Deal which was announced in July and is an integral part of the Industrial Strategy. It sets out what it believes to be the foundations for an ambitious partnership between the government and industry to transform the sector.

The ACE chief has previously highlighted the need for representative bodies to unite behind the Construction Leadership Council (CLC) and has backed its incoming co-chair Andy Mitchell, on his plea for the industry to overcome its fragmented structure to deliver the Construction Sector Deal successfully.

In the hour-long session, the ACE boss started by stressing how increased investment in digital design and offsite manufacturing, together with the sector deal’s supporting role would help improve the UK's export potential and thus turn the industry into a “product-based” one, rather than a “man-hours” offering.

While reaffirming the fact it was still “early days” for the government and the acceleration of the Construction Sector Deal, Vickers told the committee that early indications showed there were some promising signs from government.

"We have the high-level frame, the targets, but we are missing the plan. We need to focus very much now on delivery."
Hannah Vickers, ACE chief executive.

“I think from what we have seen so far, given that the deal was only announced in July, is that the deal is giving industry confidence to invest,” she said. “I’ve got SME members now setting up separate businesses because they have got a clearer understanding of how government will create a stable policy environment.”

However, Vickers did issue a word of warning to MPs on the real possibility of losing momentum. “I think we are at risk of that good will and momentum which has been built up around the sector deal stalling because there are dribs and drabs of announcements coming out,” she said. 

“For example, there are commitments in the transforming infrastructure programme and the publication government construction strategy that haven’t been met. I think consistency is really important and if we can get it to hit the market so to speak when they come out and procure then that’s when you will really have the fundamental change in industry.

The ACE chief also told the committee how trade and business associations were needed to “bridge the gap” between government and SMEs and changes in the governance of the Construction Leadership Council were necessary to utilise organisations like ACE more.

“It’s good to have headline targets and working with the new chair what we need to focus on is getting that plan around it,” Vickers added. “We have the high-level frame, the targets, but we are missing the plan. We need to focus very much now on delivery and I do think there is a need to reformat the governance around the Construction Leadership Council which has historically been represented by individual firms.”

Finally, in response to a question on what the government has done to help, Vickers identified incentives like R&D tax credits and the apprenticeship levy.

She said: “We have been working with the Construction Leadership Council to shape the strategy around the deal. I think the tangible things we have noticed to date are more specific policy announcements like the R&D tax credits which have had a big impact, we know now we are spending 3-4% of the consultancy firms revenue on it which we didn’t have before as an incentive.”