Fragmentation of the UK construction industry - Revision history

Editor at 15:56, 14 April 2021

2021-04-14T15:56:37Z

← Older revision		Revision as of 15:56, 14 April 2021
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	* Integrated project team.		* Integrated project team.
	* Latham report.		* Latham report.
		+	* OpenBuilt supply chain technology platform.
	* Subcontractor.		* Subcontractor.
	* Suppliers.		* Suppliers.

Editor at 17:57, 11 November 2020

2020-11-11T17:57:03Z

← Older revision		Revision as of 17:57, 11 November 2020
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	However, it seems likely that the industry will continue to be criticised for being fragmented as long as it has an extended, complex and diverse supply chain, each part of which has its own commercial interests and its own stance on policy.		However, it seems likely that the industry will continue to be criticised for being fragmented as long as it has an extended, complex and diverse supply chain, each part of which has its own commercial interests and its own stance on policy.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Adversarial behaviour in the UK construction industry.		* Adversarial behaviour in the UK construction industry.
	* Build UK.		* Build UK.
		+	* CIC Roadmap for Change.
	* Collaborative practices.		* Collaborative practices.
	* Construction 2025.		* Construction 2025.

Designing Buildings at 05:26, 22 October 2020

2020-10-22T05:26:53Z

← Older revision		Revision as of 05:26, 22 October 2020
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	* UK CONSTRUCTION: An economic analysis of the sector, 2013, Department for Business Innovation and skills.		* UK CONSTRUCTION: An economic analysis of the sector, 2013, Department for Business Innovation and skills.

−	[[Category:~~Education~~]] [[Category:~~DCN_Education_and_Training~~]] [[Category:~~Theory~~]] [[Category:~~Policy~~]] [[Category:~~DCN_Policy~~]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Policy]] [[Category:Education]] [[Category:Theory]] [[Category:Policy]]

Designing Buildings at 07:32, 14 June 2018

2018-06-14T07:32:24Z

← Older revision		Revision as of 07:32, 14 June 2018
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===

		+	* Adversarial behaviour in the UK construction industry.
	* Build UK.		* Build UK.
	* Collaborative practices.		* Collaborative practices.
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	* UK CONSTRUCTION: An economic analysis of the sector, 2013, Department for Business Innovation and skills.		* UK CONSTRUCTION: An economic analysis of the sector, 2013, Department for Business Innovation and skills.

−	[[Category:Education]] [[Category:Theory]] [[Category:Policy]]	+	[[Category:Education]] [[Category:DCN_Education_and_Training]] [[Category:Theory]] [[Category:Policy]] [[Category:DCN_Policy]]

Designing Buildings at 09:29, 8 June 2018

2018-06-08T09:29:26Z

Designing Buildings at 09:15, 8 June 2018

2018-06-08T09:15:46Z

Designing Buildings at 06:50, 8 June 2018

2018-06-08T06:50:06Z

← Older revision		Revision as of 06:50, 8 June 2018
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		+	[[File:Construction industry organisation chart 2018.png]]
		+
	The UK construction industry has always been complex and diverse, and the modern industry, with the separation of design and construction has to some extent always been fragmented. But despite the development of the ‘design and build’ procurement route, integrated project teams and the introduction of collaborative practices, there is strong evidence that industry fragmentation has become worse since the 1950s. This is thought to contribute to poor performance, low investment, poor skills and a lack of innovation.		The UK construction industry has always been complex and diverse, and the modern industry, with the separation of design and construction has to some extent always been fragmented. But despite the development of the ‘design and build’ procurement route, integrated project teams and the introduction of collaborative practices, there is strong evidence that industry fragmentation has become worse since the 1950s. This is thought to contribute to poor performance, low investment, poor skills and a lack of innovation.

Designing Buildings at 06:40, 8 June 2018

2018-06-08T06:40:07Z

← Older revision		Revision as of 06:40, 8 June 2018
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	* Build UK.		* Build UK.
		+	* Collaborative practices.
	* Construction 2025.		* Construction 2025.
	* Construction Industry Council.		* Construction Industry Council.
−	* Construction industry institutes and associations.	+	* Construction industry institutes and associations
	* Construction Leadership Council.		* Construction Leadership Council.
		+	* Design and build.
	* Emmerson Report.		* Emmerson Report.
	* Government Construction Strategy.		* Government Construction Strategy.
	* Government departments responsibility for construction.		* Government departments responsibility for construction.
		+	* Integrated project team.
	* Latham report.		* Latham report.
	* Subcontractor.		* Subcontractor.
	* Suppliers.		* Suppliers.
	* Supply chain.		* Supply chain.
−	* Design and build.
−	* Integrated project team.
−	* Collaborative practices.

	=== External references ===		=== External references ===

Designing Buildings at 06:38, 8 June 2018

2018-06-08T06:38:45Z

Designing Buildings: Created page with "The construction industry has always been complex and diverse, and the modern industry, with the separation of design and construction has too some extent always been fragmented...."

2018-06-08T06:26:41Z

Created page with "The construction industry has always been complex and diverse, and the modern industry, with the separation of design and construction has too some extent always been fragmented...."

New page

The construction industry has always been complex and diverse, and the modern industry, with the separation of design and construction has too some extent always been fragmented. But despite the development of the ‘design and build’ procurement route, integrated project teams and collaborative practices, there is strong evidence that fragmentation has become worse since the 1950s. This is thought to contribute to the poor performance of the industry, low investment, poor skills and a lack of innovation.

This was recognised as early as the Ministry of Works' 'Survey of Problems before the Construction Industries' (commonly known as the Emmerson Report) published in 1962, but most notably it was highlighted in Sir Michael Latham’s 1994 report 'Constructing the Team', in which Latham notoriously described the construction industry as ‘ineffective’, ‘adversarial’, ‘fragmented’ and ‘incapable of delivering for its customers’.

One of the reasons for the fragmentation of the industry is that buildings have become more complicated.

Britain emerged from the Second World War with a construction industry dominated by some very large contractors that had grown from war time work and were rebuilding a country ravaged by the Blitz. Wimpey were the biggest of these contractors, directly employing most of the labour necessary to execute its projects. Taylor Woodrow, even with half the annual turnover of Wimpey, employed 40,000 people.

Today however, as buildings become more and more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it may not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.

On a straight-forward 'traditional' building project, design consultants and the main contractor, sometimes referred to as tier 1 suppliers, work for the employer, and the main contractor may have a limited chain of their own suppliers. However, the situation becomes more complicated on large projects when the employer has several tier 1 suppliers, all with extended supply chains of their own, some of whom may be completely unknown to management at the top of the chain.

For more information see: supply chain.

This characterisation of the industry as ‘fragmented’ has now been repeated many times, with the Government Construction Strategy 2016 2020 (published in 2016) reporting that the industry was highly fragmented with a staggering 956,000 SME’s accounting for 99% of businesses.

A report published by EC Harris in 2013 suggested that for a large building project in the £20 - £25 million range, the main contractor may be directly managing around 70 sub-contracts of which a large proportion £50,000 or less. [1]

Construction 2025, published in 2013 agreed there was a high degree of fragmentation, even when compared to other sectors or to countries such as the US, France and Germany. The UK has a higher level of sub-contracting [2] driven, in part by a relatively high proportion of self-employment and a high number of small and micro businesses [3].

However, Construction 2025 pointed out that the industry’s customer base was even more fragmented, with much of the industry’s workload coming to it on a one-off and piecemeal basis. This was also referenced by the Government Construction Strategy 2011 2015 (published in May 2011) which pointed to a particular fragmentation of the public sector client base.

In fact, government oversight of the construction industry itself is spread across a large number of departments, with no clear single point of responsibility. For example, the Department for Business Innovation and Skills (BIS) is responsible for Construction 2025, but HM Treasury is responsible for the Government Construction Strategy. In 2007/8, Building Research Establishment (BRE) reportedly characterised the number of public sector bodies with an interest in construction as “a completely fragmented mess” [4].

There was an attempt to tackle this problem in 2008, with the appointment of a Chief Construction Adviser to provide cross-departmental coordination and leadership on UK construction industry policy. However, the position was scrapped in November 2015.

This situation was simplified a little in 2018 by the creation of the Ministry of Housing, Communities and Local Government (MHCLG), but there is still no overall responsibility for the industry.

For more information see: Government departments responsibility for construction.

The organisation of the industry itself does not help, with an estimated 300 institutes, associations and other bodies [4] representing all of the individual factions that now exist throughout the supply chain, and little collaboration or co-ordination between them. This leads to a wasteful and ineffective duplication of effort in some areas and leaves gaping holes in others.

See Construction industry institutes and associations for more information.

Attempts have been made to give the industry a single voice so that it is more effective at working together and lobbying government:

* The Construction Industry Council (CIC) was established in 1988 to provide ‘…a single voice for professionals in all sectors of the built environment’. It is a forum for professional bodies, research organisations and specialist business associations in the construction industry.
* The Construction Leadership Council was established in 2013 as an industry / government council jointly chaired by the Secretary of State for Business, Innovation and Skills and an industry representative.
* In 2015 the UK Contractors’ Group (UKCG) and the National Specialist Contractors' Council (NSCC) merged to create Build UK, ‘…a strong collective voice for the contracting supply chain in construction’.

However, it seems likely that the industry will continue to be criticised for being fragmented as long as it has a complex and diverse supply chain.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Build UK.
* Construction 2025.
* Construction Industry Council.

* Construction industry institutes and associations

* Construction Leadership Council.
* Emmerson Report.
* Government Construction Strategy.
* Government departments responsibility for construction.
* Latham report.
* Subcontractor.
* Suppliers.
* Supply chain.
* Design and build.
* Integrated project team.
* Collaborative practices.

=== External references ===

* [1] EC Harris for BIS (2013) Supply Chain Analysis into the UK Construction Sector .
* [2] CIB Publication No. 293: The Construction Sector System Approach: An International Framework and HM Treasury (December 2010) Infrastructure Cost Review: Technical Report.
* [3] HM Treasury (December 2010) Infrastructure Cost Review: Technical Report.
* [4] House of Commons Business and Enterprise Committee, Construction matters, Ninth Report of Session 2007–08.
* Bowley (1966) The British Building Industry, Four Studies in Response and Resistance to Change.
* UK CONSTRUCTION: An economic analysis of the sector, 2013, Department for Business Innovation and skills.

[[Category:Education]] [[Category:Theory]] [[Category:Policy]]

← Older revision		Revision as of 09:29, 8 June 2018
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	Today however, as buildings have become more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it does not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.		Today however, as buildings have become more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it does not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.

−	On a straight-forward 'traditional' project, design consultants and the main contractor, sometimes referred to as tier 1 suppliers, work for the employer, and the main contractor may have a limited chain of their own suppliers. However, the situation becomes more complicated on large projects ~~when~~ the employer may have a significant number of tier 1 suppliers, all with complex and extended supply chains of their own, some of whom may be completely unknown to the employer at the top of the chain.	+	On a straight-forward 'traditional' project, design consultants and the main contractor, sometimes referred to as tier 1 suppliers, work for the employer, and the main contractor may have a limited chain of their own suppliers. However, the situation becomes more complicated on large projects, where the employer may have a significant number of tier 1 suppliers, all with complex and extended supply chains of their own, some of whom may be completely unknown to the employer at the top of the chain.

−	For more information see: ~~supply~~ chain.	+	For more information see: Supply chain.

	A report published by EC Harris in 2013 suggested that for a large building project in the £20 - £25 million range, the main contractor may be directly managing around 70 sub-contracts of which a large proportion had a relatively low value of £50,000 or less [1].		A report published by EC Harris in 2013 suggested that for a large building project in the £20 - £25 million range, the main contractor may be directly managing around 70 sub-contracts of which a large proportion had a relatively low value of £50,000 or less [1].
Line 21:		Line 21:
	The Government Construction Strategy 2016 2020 (published in 2016) reported that the industry was dominated by a staggering 956,000 SMEs, which accounted for 99% of businesses.		The Government Construction Strategy 2016 2020 (published in 2016) reported that the industry was dominated by a staggering 956,000 SMEs, which accounted for 99% of businesses.

−	However, Construction 2025 ~~also~~ suggested that the industry’s customer base was even more fragmented, with much of the industry’s workload coming to it on a one-off, piecemeal basis. This was also referenced by the Government Construction Strategy 2011 2015 (published in May 2011) which pointed to a particular fragmentation of the public sector client base.	+	However, Construction 2025 suggested that the industry’s customer base was even more fragmented, with much of the industry’s workload coming to it on a one-off, piecemeal basis. This was also referenced by the Government Construction Strategy 2011 2015 (published in May 2011) which pointed to a particular fragmentation of the public sector client base.

	Government oversight of the construction industry is spread across a large number of departments, with no clear single point of responsibility. For example, the Department for Business Innovation and Skills (BIS) is responsible for Construction 2025, but HM Treasury is responsible for the Government Construction Strategy. In 2007/8, the Building Research Establishment (BRE) reportedly characterised the number of public sector bodies with an interest in construction as 'a completely fragmented mess' [4].		Government oversight of the construction industry is spread across a large number of departments, with no clear single point of responsibility. For example, the Department for Business Innovation and Skills (BIS) is responsible for Construction 2025, but HM Treasury is responsible for the Government Construction Strategy. In 2007/8, the Building Research Establishment (BRE) reportedly characterised the number of public sector bodies with an interest in construction as 'a completely fragmented mess' [4].

−	There was an attempt to tackle this problem in ~~2008~~, with the appointment of a Chief Construction Adviser, intended to provide cross-departmental coordination and leadership on construction industry policy. However, this position was scrapped in November 2015.	+	There was an attempt to tackle this problem in 2009, with the appointment of a Chief Construction Adviser, intended to provide cross-departmental coordination and leadership on construction industry policy. However, this position was scrapped in November 2015.

	This departmental situation was simplified a little in 2018 by the creation of the Ministry of Housing, Communities and Local Government (MHCLG), but there is still no overall government responsibility for the industry.		This departmental situation was simplified a little in 2018 by the creation of the Ministry of Housing, Communities and Local Government (MHCLG), but there is still no overall government responsibility for the industry.
Line 31:		Line 31:
	For more information see: Government departments responsibility for construction.		For more information see: Government departments responsibility for construction.

−	The internal organisation of the industry itself does not help, with an estimated 300 institutes, associations and other bodies ~~[4]~~ representing each of the individual factions that now exist throughout the extended supply chain. This leads to a wasteful and ineffective duplication of effort in some areas and leaves gaping holes in others.	+	The internal organisation of the industry itself does not help, with an estimated 300 institutes, associations and other bodies representing each of the individual factions that now exist throughout the extended supply chain [4]. This leads to a wasteful and ineffective duplication of effort in some areas and leaves gaping holes in others.

	See Construction industry institutes and associations for more information.		See Construction industry institutes and associations for more information.

← Older revision		Revision as of 09:15, 8 June 2018
Line 1:		Line 1:
−	[[File:~~Construction industry organisation chart 2018~~.png]]	+	[[File:Construction_industry_organisation_chart_2018.png\|link=File:Construction_industry_organisation_chart_2018.png]]

−	The UK construction industry has always been complex and diverse, and the modern industry, with ~~the~~ separation of design and construction has to some extent always been fragmented. But despite the development of the ‘design and build’ procurement route, integrated project teams and the introduction of collaborative practices, there is strong evidence that industry fragmentation has become worse since the 1950s. This is thought to contribute to poor performance, low investment, poor skills and a lack of innovation.	+	The UK construction industry has always been complex and diverse, and the modern industry, with it's separation of design and construction has to some extent always been fragmented. But despite the development of the ‘design and build’ procurement route, integrated project teams and the introduction of collaborative practices, there is strong evidence that industry fragmentation has become progressively worse since the 1950s. This is thought to contribute to poor performance, low investment, poor skills and a lack of innovation.

	This was recognised as early as the Ministry of Works 'Survey of Problems before the Construction Industries' (the Emmerson Report) published in 1962, but most notably it was highlighted in Sir Michael Latham’s 1994 report 'Constructing the Team', which notoriously described the industry as ‘ineffective’, ‘adversarial’, ‘fragmented’ and ‘incapable of delivering for its customers’.		This was recognised as early as the Ministry of Works 'Survey of Problems before the Construction Industries' (the Emmerson Report) published in 1962, but most notably it was highlighted in Sir Michael Latham’s 1994 report 'Constructing the Team', which notoriously described the industry as ‘ineffective’, ‘adversarial’, ‘fragmented’ and ‘incapable of delivering for its customers’.
Line 11:		Line 11:
	Today however, as buildings have become more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it does not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.		Today however, as buildings have become more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it does not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.

−	On a straight-forward 'traditional' ~~building~~ project, design consultants and the main contractor, sometimes referred to as tier 1 suppliers, work for the employer, and the main contractor may have a limited chain of their own suppliers. However, the situation becomes more complicated on large projects when the employer may have ~~several~~ tier 1 suppliers, all with extended supply chains of their own, some of whom may be completely unknown to the employer at the top of the chain.	+	On a straight-forward 'traditional' project, design consultants and the main contractor, sometimes referred to as tier 1 suppliers, work for the employer, and the main contractor may have a limited chain of their own suppliers. However, the situation becomes more complicated on large projects when the employer may have a significant number of tier 1 suppliers, all with complex and extended supply chains of their own, some of whom may be completely unknown to the employer at the top of the chain.

	For more information see: supply chain.		For more information see: supply chain.

−	~~The Government Construction Strategy 2016 2020 (~~published in ~~2016) reporting~~ that the ~~industry was dominated~~ a ~~staggering 956~~,000 ~~SME’s accounting for 99% of businesses~~.	+	A report published by EC Harris in 2013 suggested that for a large building project in the £20 - £25 million range, the main contractor may be directly managing around 70 sub-contracts of which a large proportion had a relatively low value of £50,000 or less [1].

−	~~A report~~ published ~~by EC Harris~~ in 2013 ~~suggested that for~~ a ~~large building project in~~ the ~~£20 - £25 million range~~, the ~~main contractor may be directly managing around 70~~ sub-~~contracts~~ of ~~which~~ a ~~large proportion had a value~~ of ~~£50,000 or less~~ [1].	+	Construction 2025, published in 2013 also pointed to a high degree of fragmentation, even when compared to other sectors or to countries such as the USA, France and Germany. This, it has been suggested, is because the UK has a higher level of sub-contracting [2] driven, in part by the relatively high proportion of self-employment and a high number of small and micro businesses [3].

−	Construction ~~2025,~~ published in ~~2013 also pointed to~~ a ~~high degree of fragmentation~~, ~~even when compared to other sectors or to countries such as the US~~, ~~France and Germany. The UK has a higher level of sub-contracting [2] driven, in part by the relatively high proportion of self-employment and a high number~~ of ~~small and micro~~ businesses ~~[3]~~.	+	The Government Construction Strategy 2016 2020 (published in 2016) reported that the industry was dominated by a staggering 956,000 SMEs, which accounted for 99% of businesses.

	However, Construction 2025 also suggested that the industry’s customer base was even more fragmented, with much of the industry’s workload coming to it on a one-off, piecemeal basis. This was also referenced by the Government Construction Strategy 2011 2015 (published in May 2011) which pointed to a particular fragmentation of the public sector client base.		However, Construction 2025 also suggested that the industry’s customer base was even more fragmented, with much of the industry’s workload coming to it on a one-off, piecemeal basis. This was also referenced by the Government Construction Strategy 2011 2015 (published in May 2011) which pointed to a particular fragmentation of the public sector client base.

−	Government oversight of the construction industry is spread across a large number of departments, with no clear single point of responsibility. For example, the Department for Business Innovation and Skills (BIS) is responsible for Construction 2025, but HM Treasury is responsible for the Government Construction Strategy. In 2007/8, Building Research Establishment (BRE) reportedly characterised the number of public sector bodies with an interest in construction as “a completely fragmented ~~mess”~~ [4].	+	Government oversight of the construction industry is spread across a large number of departments, with no clear single point of responsibility. For example, the Department for Business Innovation and Skills (BIS) is responsible for Construction 2025, but HM Treasury is responsible for the Government Construction Strategy. In 2007/8, the Building Research Establishment (BRE) reportedly characterised the number of public sector bodies with an interest in construction as 'a completely fragmented mess' [4].

−	There was an attempt to tackle this problem in 2008, with the appointment of a Chief Construction Adviser to provide cross-departmental coordination and leadership on UK construction industry policy. However, this position was scrapped in November 2015.	+	There was an attempt to tackle this problem in 2008, with the appointment of a Chief Construction Adviser, intended to provide cross-departmental coordination and leadership on construction industry policy. However, this position was scrapped in November 2015.

−	This situation was simplified a little in 2018 by the creation of the Ministry of Housing, Communities and Local Government (MHCLG), but there is still no overall government responsibility for the industry.	+	This departmental situation was simplified a little in 2018 by the creation of the Ministry of Housing, Communities and Local Government (MHCLG), but there is still no overall government responsibility for the industry.

	For more information see: Government departments responsibility for construction.		For more information see: Government departments responsibility for construction.

−	The internal organisation of the industry itself does not help, with an estimated 300 institutes, associations and other bodies [4] representing ~~all~~ of the individual factions that now exist throughout the extended supply chain~~, and little collaboration or co-ordination between them~~. This leads to a wasteful and ineffective duplication of effort in some areas and leaves gaping holes in others.	+	The internal organisation of the industry itself does not help, with an estimated 300 institutes, associations and other bodies [4] representing each of the individual factions that now exist throughout the extended supply chain. This leads to a wasteful and ineffective duplication of effort in some areas and leaves gaping holes in others.

	See Construction industry institutes and associations for more information.		See Construction industry institutes and associations for more information.

−	~~Attempts~~ have been made to give the industry a single voice so that it works together more effectively and is better able to lobby government:	+	A few attempts have been made to give the industry a single voice so that it works together more effectively and is better able to lobby government:

	* The Construction Industry Council (CIC) was established in 1988 to provide ‘…a single voice for professionals in all sectors of the built environment’.		* The Construction Industry Council (CIC) was established in 1988 to provide ‘…a single voice for professionals in all sectors of the built environment’.
Line 41:		Line 41:
	* In 2015 the UK Contractors’ Group (UKCG) and the National Specialist Contractors' Council (NSCC) merged to create Build UK, ‘…a strong collective voice for the contracting supply chain in construction’.		* In 2015 the UK Contractors’ Group (UKCG) and the National Specialist Contractors' Council (NSCC) merged to create Build UK, ‘…a strong collective voice for the contracting supply chain in construction’.

−	However, it seems likely that the industry will continue to be criticised for being fragmented as long as it has ~~a long~~, complex and diverse supply chain, each part of which has its own commercial interests and its own stance on policy.	+	However, it seems likely that the industry will continue to be criticised for being fragmented as long as it has an extended, complex and diverse supply chain, each part of which has its own commercial interests and its own stance on policy.

	= Find out more =		= Find out more =

← Older revision		Revision as of 06:38, 8 June 2018
Line 1:		Line 1:
−	The construction industry has always been complex and diverse, and the modern industry, with the separation of design and construction has ~~too~~ some extent always been fragmented. But despite the development of the ‘design and build’ procurement route, integrated project teams and collaborative practices, there is strong evidence that fragmentation has become worse since the 1950s. This is thought to contribute to ~~the~~ poor performance ~~of the industry~~, low investment, poor skills and a lack of innovation.	+	The UK construction industry has always been complex and diverse, and the modern industry, with the separation of design and construction has to some extent always been fragmented. But despite the development of the ‘design and build’ procurement route, integrated project teams and the introduction of collaborative practices, there is strong evidence that industry fragmentation has become worse since the 1950s. This is thought to contribute to poor performance, low investment, poor skills and a lack of innovation.

−	This was recognised as early as the Ministry of Works' 'Survey of Problems before the Construction Industries' (~~commonly known as~~ the Emmerson Report) published in 1962, but most notably it was highlighted in Sir Michael Latham’s 1994 report 'Constructing the Team', in which ~~Latham~~ notoriously described the ~~construction~~ industry as ‘ineffective’, ‘adversarial’, ‘fragmented’ and ‘incapable of delivering for its customers’.	+	This was recognised as early as the Ministry of Works 'Survey of Problems before the Construction Industries' (the Emmerson Report) published in 1962, but most notably it was highlighted in Sir Michael Latham’s 1994 report 'Constructing the Team', which notoriously described the industry as ‘ineffective’, ‘adversarial’, ‘fragmented’ and ‘incapable of delivering for its customers’.

	One of the reasons for the fragmentation of the industry is that buildings have become more complicated.		One of the reasons for the fragmentation of the industry is that buildings have become more complicated.

−	Britain emerged from the Second World War with a construction industry dominated by ~~some~~ very large contractors that had grown from war time work and were rebuilding a country ravaged by the Blitz. Wimpey were the biggest of these contractors, directly employing most of the labour necessary to execute its projects. Taylor Woodrow, even with half the annual turnover of Wimpey, employed 40,000 people.	+	Britain emerged from the Second World War with a construction industry dominated by very large contractors that had grown from war time work and were rebuilding a country ravaged by the Blitz. Wimpey were the biggest of these contractors, directly employing most of the labour necessary to execute its projects. Taylor Woodrow, even with half the annual turnover of Wimpey, employed 40,000 people.

−	Today however, as buildings become ~~more and~~ more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it ~~may~~ not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.	+	Today however, as buildings have become more complex, it is less and less likely that any one contractor will have the required skills to carry out all of the works necessary to construct them, and it does not make good commercial sense to take on new employees for one project that would then have to be laid off for the next. Increasingly therefore, contractors use sub-contractors to carry out particular elements of the works.

−	On a straight-forward 'traditional' building project, design consultants and the main contractor, sometimes referred to as tier 1 suppliers, work for the employer, and the main contractor may have a limited chain of their own suppliers. However, the situation becomes more complicated on large projects when the employer ~~has~~ several tier 1 suppliers, all with extended supply chains of their own, some of whom may be completely unknown to ~~management~~ at the top of the chain.	+	On a straight-forward 'traditional' building project, design consultants and the main contractor, sometimes referred to as tier 1 suppliers, work for the employer, and the main contractor may have a limited chain of their own suppliers. However, the situation becomes more complicated on large projects when the employer may have several tier 1 suppliers, all with extended supply chains of their own, some of whom may be completely unknown to the employer at the top of the chain.

	For more information see: supply chain.		For more information see: supply chain.

−	~~This characterisation of the industry as ‘fragmented’ has now been repeated many times, with the~~ Government Construction Strategy 2016 2020 (published in 2016) reporting that the industry was ~~highly fragmented with~~ a staggering 956,000 SME’s accounting for 99% of businesses.	+	The Government Construction Strategy 2016 2020 (published in 2016) reporting that the industry was dominated a staggering 956,000 SME’s accounting for 99% of businesses.

−	A report published by EC Harris in 2013 suggested that for a large building project in the £20 - £25 million range, the main contractor may be directly managing around 70 sub-contracts of which a large proportion £50,000 or less. [1]	+	A report published by EC Harris in 2013 suggested that for a large building project in the £20 - £25 million range, the main contractor may be directly managing around 70 sub-contracts of which a large proportion had a value of £50,000 or less [1].

−	Construction 2025, published in 2013 ~~agreed there was~~ a high degree of fragmentation, even when compared to other sectors or to countries such as the US, France and Germany. The UK has a higher level of sub-contracting [2] driven, in part by a relatively high proportion of self-employment and a high number of small and micro businesses [3].	+	Construction 2025, published in 2013 also pointed to a high degree of fragmentation, even when compared to other sectors or to countries such as the US, France and Germany. The UK has a higher level of sub-contracting [2] driven, in part by the relatively high proportion of self-employment and a high number of small and micro businesses [3].

−	However, Construction 2025 ~~pointed out~~ that the industry’s customer base was even more fragmented, with much of the industry’s workload coming to it on a one-off ~~and~~ piecemeal basis. This was also referenced by the Government Construction Strategy 2011 2015 (published in May 2011) which pointed to a particular fragmentation of the public sector client base.	+	However, Construction 2025 also suggested that the industry’s customer base was even more fragmented, with much of the industry’s workload coming to it on a one-off, piecemeal basis. This was also referenced by the Government Construction Strategy 2011 2015 (published in May 2011) which pointed to a particular fragmentation of the public sector client base.

−	~~In fact, government~~ oversight of the construction industry ~~itself~~ is spread across a large number of departments, with no clear single point of responsibility. For example, the Department for Business Innovation and Skills (BIS) is responsible for Construction 2025, but HM Treasury is responsible for the Government Construction Strategy. In 2007/8, Building Research Establishment (BRE) reportedly characterised the number of public sector bodies with an interest in construction as “a completely fragmented mess” [4].	+	Government oversight of the construction industry is spread across a large number of departments, with no clear single point of responsibility. For example, the Department for Business Innovation and Skills (BIS) is responsible for Construction 2025, but HM Treasury is responsible for the Government Construction Strategy. In 2007/8, Building Research Establishment (BRE) reportedly characterised the number of public sector bodies with an interest in construction as “a completely fragmented mess” [4].

−	There was an attempt to tackle this problem in 2008, with the appointment of a Chief Construction Adviser to provide cross-departmental coordination and leadership on UK construction industry policy. However, ~~the~~ position was scrapped in November 2015.	+	There was an attempt to tackle this problem in 2008, with the appointment of a Chief Construction Adviser to provide cross-departmental coordination and leadership on UK construction industry policy. However, this position was scrapped in November 2015.

−	This situation was simplified a little in 2018 by the creation of the Ministry of Housing, Communities and Local Government (MHCLG), but there is still no overall responsibility for the industry.	+	This situation was simplified a little in 2018 by the creation of the Ministry of Housing, Communities and Local Government (MHCLG), but there is still no overall government responsibility for the industry.

	For more information see: Government departments responsibility for construction.		For more information see: Government departments responsibility for construction.

−	The organisation of the industry itself does not help, with an estimated 300 institutes, associations and other bodies [4] representing all of the individual factions that now exist throughout the supply chain, and little collaboration or co-ordination between them. This leads to a wasteful and ineffective duplication of effort in some areas and leaves gaping holes in others.	+	The internal organisation of the industry itself does not help, with an estimated 300 institutes, associations and other bodies [4] representing all of the individual factions that now exist throughout the extended supply chain, and little collaboration or co-ordination between them. This leads to a wasteful and ineffective duplication of effort in some areas and leaves gaping holes in others.

	See Construction industry institutes and associations for more information.		See Construction industry institutes and associations for more information.

−	Attempts have been made to give the industry a single voice so that it ~~is more effective at working~~ together and ~~lobbying~~ government:	+	Attempts have been made to give the industry a single voice so that it works together more effectively and is better able to lobby government:

−	* The Construction Industry Council (CIC) was established in 1988 to provide ‘…a single voice for professionals in all sectors of the built environment’~~. It is a forum for professional bodies, research organisations and specialist business associations in the construction industry~~.	+	* The Construction Industry Council (CIC) was established in 1988 to provide ‘…a single voice for professionals in all sectors of the built environment’.
−	* The Construction Leadership Council was established in 2013 as an industry / government council jointly chaired by the Secretary of State for Business, Innovation and Skills and an industry representative.	+	* The Construction Leadership Council (CLC) was established in 2013 as an industry / government council jointly chaired by the Secretary of State for Business, Innovation and Skills and an industry representative.
	* In 2015 the UK Contractors’ Group (UKCG) and the National Specialist Contractors' Council (NSCC) merged to create Build UK, ‘…a strong collective voice for the contracting supply chain in construction’.		* In 2015 the UK Contractors’ Group (UKCG) and the National Specialist Contractors' Council (NSCC) merged to create Build UK, ‘…a strong collective voice for the contracting supply chain in construction’.

−	However, it seems likely that the industry will continue to be criticised for being fragmented as long as it has a complex and diverse supply chain.	+	However, it seems likely that the industry will continue to be criticised for being fragmented as long as it has a long, complex and diverse supply chain, each part of which has its own commercial interests and its own stance on policy.

	= Find out more =		= Find out more =
Line 48:		Line 48:
	* Construction 2025.		* Construction 2025.
	* Construction Industry Council.		* Construction Industry Council.
−		+	* Construction industry institutes and associations.
−	* Construction industry institutes and associations	+
−		+
	* Construction Leadership Council.		* Construction Leadership Council.
	* Emmerson Report.		* Emmerson Report.