Prominent figures from the construction and built environment industry, policymakers and technical experts came together recently for a thought-provoking roundtable organised by Arcadis in Westminster. Drawing on the impacts and challenges raised in this year’s annual International Construction Costs (ICC) 2023 report, the focus of the discussion was on addressing the ongoing challenges posed by rising construction costs, skills shortages, and the imperative of sustainable development in one of the world's most expensive cities to build: London.
The event was attended by representatives from a wide range of organisations including: The Labour Party, the Department for Energy Security and Net Zero, Earls Court Development Company, The Crown Estate, Ebbsfleet Development Corporation, London Legacy Development Corporation, Westminster City Council, Hyde Housing, Citibank and UBS.
Quarterly reporting vs long-term strategy
Our guest of honour Bill Esterson, formerly Shadow Minister for Business and Industry and recently appointed Shadow Minister for Roads, began the discussion by highlighting the importance of ongoing communications and lesson sharing between the private and public sector, in particular between business and politicians. Specifically, he raised challenges that he has come across from conversations with business which hamper the ability to take a long-term view, such as the need for quarterly reporting and regular uncertainty caused by election cycles.
He emphasised the importance of a long-term industrial strategy that can transform the economy through partnerships and sustained investments. This strategy, he explained, will be rolled out from day one of a Labour government and should consider both domestic and global relationships, particularly with the EU, for improved trade agreements. He praised the efforts of a previous Conservative administration under Theresa May to develop an industrial strategy and highlighted the importance of ensuring cross-party support to ensure they can last beyond election cycles.
Tim Preston, Account Director for Local Government at Arcadis, pointed out that capacity creation remains a significant challenge in the industry. He stressed the need for action in terms of skills development and innovation to address this issue effectively.
A participant from Westminster City Council discussed the importance of user-friendly carbon offsetting rates. They emphasised the necessity of having access to the right skill set within the council to tackle this crucial aspect of sustainability effectively.
The importance of intelligent clients and clear objectives
There was significant discussion around the ongoing challenges in client/contractor relations which have been brought under strain by ongoing uncertainty and inflationary pressures. One guest from Ebbsfleet Development Corporation highlighted the importance of an intelligent client when partnering with the public sector. They also pointed out the challenge of setting clear objectives, particularly when assessing bids. Balancing considerations like managing carbon and delivering value can be complex.
The need for both clients and contractors to elucidate the value of net-zero building or retrofit was emphasised by an attendee from the London Legacy Development Corporation, and Tim Preston raised the question of whether contractors can respond appropriately to short-term challenges, such as delays, aligning these responses with long-term sustainability goals.
The importance of optimism and ambitious goals for retrofit and clean heat
Sometimes the challenges faced in reaching net zero goals can seem overwhelming, both to businesses and the public. However, reasons for being optimistic about our ability to rise to the challenge were highlighted by a representative from the Department for Energy Security and Net Zero (DESNZ). The room was asked to guess what percentage of the UK’s buildings are already Energy Performance Certificate (EPC) Grade C compliant (new legislation will mean that rental properties will be required to have a minimum C ranking for energy efficiency on the EPC scale of A-G, ‘A’ being the most energy efficient). The true figure - 50% - was much higher than most people in the room expected.
The importance of maintaining ambition to go further was thereafter spotlighted. DESNZ's plan to upgrade 700,000 properties annually to EPC compliancy was referenced too here. The importance in ambitious action to roll out clean heat to account for the remainder of carbon emissions in buildings and the importance of not shying away from the need for large and widescale regeneration projects was further mentioned.
Decarbonisation and heritage challenges
While the discussion had focused mainly on the residential sector, the challenges faced by many businesses in the commercial sector particularly in situations where building materials like glass and steel are difficult to decarbonise were flagged by a guest from Citibank, as well as the importance of avoiding unnecessary demolitions.
The complexities of tenant-landlord relationships, further complicated by heritage considerations, were raised during the discussion by a representative from The Crown Estate. Alongside this, the need to collaborate with innovators to address specific challenges were highlighted, noting that, for example, there is currently no technological solution out there that can get heritage windows up to EPC A compliancy.
The rapid pace of technological advancements was discussed by another guest from the London Legacy Development Corporation. Here, shared lessons learned from past projects, highlighting the challenges of well-meaning policies that can lead to unintended consequences, were considered.
Long-lasting partnerships and value measurement
The discussion then moved on to the importance of accurate value measurement in gaining effective and accurate insight into the long-term benefits of decarbonisation. Rebecca Harlow, UK Net Zero Carbon Proposition Lead at Arcadis, emphasised the importance of creating long-lasting partnerships that consider whole estates and measure value effectively. She also noted the need to challenge myths surrounding embedded carbon, such as building to a lower embodied target inevitably leads to higher costs. Rebecca also added that Arcadis’ library of projects indicate that best practice approaches can lower carbon using the philosophy of ‘building lean’.
One guest highlighted the need for a clear pipeline of shovel-ready projects in the transport and major infrastructure sectors, as well as the importance of partnerships and long-term visibility.
Common goals and cross-body collaboration
Ultimately however, one of the key themes to emerge from the discussion was the need for long-term certainty and collaboration across sectors, and government departments. The uncertainty faced by long-term horizon projects such as Ebbsfleet and the need for common goals that go beyond traditional client-contractor relationships were flagged here by an attendee from Ebbsfleet Development Corporation.
Subsequently, Bill Esterson then pointed out that effective collaboration across different departments and areas is essential, both in the public and private sectors. He cited the success of the Covid-19 vaccines taskforce as an example of how cross-government collaboration can achieve significant results.
Arcadis was delighted to host such an engaging and timely discussion which shed light on the multifaceted challenges facing the construction and built environment industry in London. The discussions highlighted the importance of long-term strategies, sustainable practices, and collaboration across sectors to navigate these challenges successfully. As London strives for a greener and more resilient future, the insights shared at this event will undoubtedly play a crucial role in shaping its path forward.
