Saturday, December 22, 2007
Alex on the Herald has produced an obviously well informed piece on why construction costs are so outrageous. It should be compulsory reading for anybody in politics.
There are a few reasons why UK construction projects cost such a ridiculously high amount.
First of all, there is the universally charged Day-Works scam, charged by every single major construction firm in the UK, which essentially doubles costs. Don't like it? Try finding a contractor who will work without it...Interestingly, it is unheard of in Japan, where I once witnessed an entire motorway built in a week.
Second of all, there is the ridiculous Health and Safety industry. Initially a decent idea as the UK had the highest rate of deaths in construction of any developed nation - now simply an industry in itself. It leads to horrendously over-engineered solutions, overspending on materials and design and huge delays in completion times. Complain about it and you're seen as someone who wants construction workers to be mangled by any piece of passing machinery. Health and Safety employs 200,000+ people in the UK. In France, it employs no-one, and they're not slow to adopt restrictive working practices.
Third of all, there is our horrifically labyrinthine planning process, brought about by there being simply too many politicians. In terms of population Greater Glasgow and Manhattan are pretty similar. Manhattan has 10 councillors; Glasgow has 328.
Fourthly, there is the cost of land in the UK. Progressive land release policies, such as the Greens' Land Tax, designed to prevent speculative land banking by housebuilders, supermarkets etc are actually a good idea, which would prevent property prices from artificially inflating - I don't generally have a lot of time for the Greens, but this is a good policy, and one that works well elsewhere.
Fifthly - there are very few skilled construction professionals in the UK, and those that are employed in the industry generally suffer from low wages, poor working conditions and often poor training. I do laugh when I hear of contractors trying to tempt school leavers to take on a career with them - abusive, one-sided contracts, no rights and short-termism are rife. Consequently, sub-contracting is everywhere.
So the next time you wonder why our major projects cost so much - simply think of the five reasons given above.
I disagree that landbanking is the problem - I think it is a symptom of the fact that the planning system prevents so much land getting planning permission which makes land with permission unnaturally expensive. However whichever is the primary fault it does mean building land is unnecessarily expensive, with costs running right through the process.
This demonstrates the strength of the net. There is absolutely no way that print journalists would ever, even if they already know all this as i am sure 1 or 2 do, could ever be allowed to break ranks & publish an article like Alex's.
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