Chapter One Introduction and the Role of Clients

1.1 The Joint Review of Procurement and Contractual Arrangements in the United Kingdom Construction Industry was announced to the House of Commons on 5th July 1993 (Hansard, Written Answers, Column 4). The Interim Report, entitled "Trust and Money", was published on 13th December 1993. The Under Secretary of State at the Department of the Environment (DOE), Mr Tony Baldry MP, also reported to the House of Commons on the same day in an answer to Mr Roger Sims MP (Hansard, Written Answers, Col.454).

1.2 The funding parties to the Review have remained as stated in the Interim Report - the DOE, the Construction Industry Council (CIC), the Construction Industry Employers Council (CIEC), the National Specialist Contractors Council (NSCC) and the Specialist Engineering Contractors Group (SECG). Clients have continued to be closely involved in the Review, and are represented by the British Property Federation (BPF) and the Chartered Institute of Purchasing and Supply (CIPS). The terms of reference and details of the industry funding organisations are contained in Appendices I and II to this Report.

1.3 Throughout the Review, the four industry funding organisations and the two client groups have been represented by Assessors, and the Department of the Environment by the Director of the Construction Sponsorship Directorate. The Department has also provided the full time secretariat for the Review. Once again, it is my privilege to express the deepest possible thanks to those people who have given immense support and wise counsel to me. They have been:-

All of them have devoted tremendous time and effort to this work, and I am most grateful to them. My gratitude also goes to the support groups which each of the organisations formed to guide their Assessors, and to the staff of those organisations on whom much additional work has fallen. I have had constant assistance and a speedy response to all the requests which I have made for information and guidance. Without such support, the work could not have been completed.

1.4 During the Review, the Assessors met 8 times as a group. They were never intended to be a decision making committee, still less a drafting body. Nor were they required to approve the Interim Report or this final document. They formed an expert sounding board and conduit of advice. But they became much more. A tremendous spirit of co-operation and mutual confidence soon emerged. We discussed highly contentious issues, which directly affected the livelihood and commercial prospects of their member organisations. Feelings on these issues run very deep, as my meetings and postbag have confirmed, and as I sought to indicate in the Interim Report. Over 100 Members of Parliament, including Cabinet and "Shadow" Cabinet Ministers, wrote to me expressing the concern of firms in their constituencies about aspects of the Review. It would not have been surprising if we had had angry meetings of the Assessors, perhaps even breakdowns in the discussions. Nothing could be further from the reality. The participants listened carefully to each other, weighed the contrasting arguments seriously, and frequently reconsidered their own views. It was said on several occasions that opinions had been changed by what had been heard. A person who had come into the meeting believing that his perspective was the only way to look at a problem came to realise that there were other genuine viewpoints.

1.5 That feeling has led some participants to urge that the understanding which has been achieved over the last twelve months should not be lost after the publication of this Report. I agree. The involvement of clients has been particularly significant. There have been many committees in the past which have brought together different parts of the construction industry. Some of them have reported directly to Ministers or been chaired by them. But the crucial change in recent years has been the grouping together of the many diverse interests into a small number of bodies, and the emergence of clients as major participants in the discussions. It would be unthinkable now for any new forum to be set up which did not include clients. Some of the organisations involved in the Review have suggested administrative structures for future work. I examine this later in the report and make recommendations accordingly.

1.6 As well as the Assessors, whom I have also met separately on frequent occasions, Ms Bronnert and I have had many meetings with groups, associations, companies, partnerships, academic institutions, Government Departments and individuals. So far as possible, we agreed to meet everyone who asked to see us, though for reasons of available time some people saw one of us but not both, and we had to bring the discussions to an effective end at Easter. A list of those meetings is set out in Appendix III. We are indebted to all who made themselves available in this way. Their contributions have been invaluable.

1.7 The Interim Report called for public debate and for proposals to assist the formulation of recommendations for the Final Report. A very large number have been received and all have been closely studied. A list of those papers has been compiled by the DOE for reference purposes. Many people have sent letters, which were also gratefully received and carefully considered.

1.8 The Interim Report sought:

1. To describe the background to the Review and its parameters.

2. To define the concerns of the differing parties to the construction process, some of which were mutually exclusive.

3. To pose questions about how performance could be improved and genuine grievances or problems addressed.

4. To reiterate and expand upon what has long been accepted as good practice in the industry but is often honoured more in the breach than in the observance.

1.9 The response to the Interim Report was generally positive. Most respondents felt that it had addressed the main issues. Some preferred to place emphasis upon certain findings rather than others. Some wanted a detailed look at new techniques and approaches which they believed would assist performance. Some totally new ideas have emerged since the Interim Report.

1.10 Many people have asked whether action would be taken to implement any proposals which the Final Report made. They pointed out that there had been widespread agreement on the Simon Report1, the report by Sir Harold Emmerson2 and the Banwell Report3, but rather less action. Some of the recommendations of those reports were originally implemented. But other problems persisted, and do so to this day, even though the structure of the industry and the nature of many of its clients have changed dramatically, The initiative must be taken by Government, in conjunction with major clients and other leaders of the construction process. If this opportunity is not taken, it may not re-occur for many years, and a new report may be commissioned in the year 2024 to go over the same ground again!

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1 Report of the Central Council for Works and Buildings, chaired by Sir Ernest Simon: "The Placing and Management of Building Contracts", HMSO, 1944.

2 "Survey of Problems Before the Construction Industries", HMSO, 1962.

3 Report of the "Committee on the Placing and Management of Contracts for Building and Civil Engineering work", chaired by Sir Harold Banwell, HMSO, 1964.