In recent months, infrastructure has been firmly under the spotlight, with the most recent publication of the National Infrastructure and Construction Pipeline raising questions around the sector’s capacity to deliver. Government has also put pressure on providers to improve targets, whether that’s build rates for social housing or improvements to fibre networks – and rightly so.
We’re also seeing a significant proportion of construction spend pointed towards ensuring our current infrastructure is up to scratch, with improvements taking place across rail networks. In the current political context, it’s more important than ever that the utilities sector continues to demonstrate that it is investing in the future of its infrastructure, as well as explain the benefit to customers.
The industry has grappled with the issue of time-intensive repair works for quite some time. And with utilities, the issue is particularly acute – basic maintenance jobs can often take several years to complete. Although the benefits of newer construction methods are beginning to come to fruition, we haven’t seen this pace of change make its way to utilities yet.
In both housebuilding and commercial building, the concept of off-site manufacturing and standardised construction have been implemented to combat poor productivity. Off-site construction not only speeds up the delivery of projects – therefore reducing the costs involved – it also fills a pressing skills gap.
While the need to streamline projects may be particularly crucial in the construction industry in light of soaring housing demand and ambitious build-rate targets, the utilities space is facing similar pressures. Attention is firmly fixed on improving user experience and overcoming challenges created by ageing and complex infrastructure.
Meanwhile, maintenance and replacement costs are difficult to predict over an extended time frame. Because the utility sector relies so heavily on bespoke repair methods, budgets are often exceeded in projects and are difficult to plan.
Last year alone, more than a third (35 per cent) of all construction spend in the UK was allocated to repair and maintenance, totalling almost £57 billion, up 1.1 per cent on 2017. This is compared to only £20 billion being spent on new work in the infrastructure space. While this isn’t specifically allocated to utilities spend, it paints a picture of just how much capital is required in ensuring that existing infrastructure remains intact. Renewal, repair and maintenance work on utilities infrastructure is time and cost-intensive and can often be a very bespoke and piecemeal approach when it comes to implementing change.
A more standardised approach could improve the construction and performance of infrastructure assets. The water sector, for example, has multiple challenges to overcome, including efficiency, reliability and sustainability.
Some utility providers are adopting a broad programme approach that encourages product standardisation through off-site prefabrication for production. Rather than tackling each product or project individually, companies are identifying repeatable tasks and standard products that can be applied to a vast proportion of the production line.
Firms are reporting increased efficiency with a standardised approach – alongside other factors such as effective collaboration of partners and suppliers – with some reporting it contributes to annual savings of 2 per cent to 3 per cent in some cases. Progress is evidently being made, but more needs to be done to accelerate the pace of change.
Where the utilities sector has previously relied on long-lived assets and gradual policy shifts, its prosperity going forward – like the wider infrastructure space – will depend heavily on shifting mindsets by adopting a “catalogue” approach, rather than designing products from scratch.
And it’s not only those in the utilities industry that have a role to play. The government has also begun implementing quotas to ensure innovative practices are embedded within manufacturing processes. Communities secretary James Brokenshire recently announced £250 million to support housing, with a quota of more than 600 homes being built through off-site construction. This inevitably puts pressure on firms to deliver and we encourage similar quotas to be applied to the utility sector too.
The benefits of off-site construction are already becoming apparent in the wider infrastructure space. Recent government announcements are certainly an endorsement of the model, particularly when it comes to housebuilding. But we shouldn’t stop there.
With the potential for further efficiencies while boosting productivity and ensuring quality, we should be embracing the off-site model in the utilities sector too.