Exploration Into The Effects Of Partnering Construction Essay

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An exploration into the effects of partnering in the construction industry. Considering the works studies and attitudes of construction professionals and academics alike. Was the Latham report accurate?

Partnering outlined

The chosen topic for this dissertation is the idea of partnering a concept that was really brought to the forefront of the construction industry in1994 by sir Latham and his report XXXXX. This reported focused on construction moving away from its traditional abrasive cut throat nature were by stakeholders tend to look after their own interests, towards a much more open and honest approach, encouraging teamwork amongst all stakeholders to work towards common goals. The report boast's of projects becoming far more economical in terms of both cost and time.

With common goals being a major aim conflicts between stake holders are said to of been reduced dramatically, in turn dramatically reducing the costs and time on litigation.

However partnering is not a new concept, but simply a modification on supply chain management which has been in play for many years with great success in other industries namely manufacturing this will be discussed in further detail though out the dissertation.

Perhaps it is the success of other industries that helped give so much weight to the Latham report and convinced so many stakeholders to ditch the traditional approach and attempt partnering. Reports and case studies suggest that in the main these companies have had favourable outcomes though there are companies who have had the opposite. Leading academic 'Jonh Bennet' of reading university has been involved in many studies since the emergence of partnering, in his code of practice for strategic collaborative working he highlights time savings of 60% and cost savings of 50% can be made due to successful partnering agreements.

Given the evidence of such huge saving on time and cost it seems unthinkable that some stakeholders are reluctant to join in the feeding frenzy, so why do stakeholders have their doubts, well one of the main reasons comes down to contractual matters. The intended sprit of partnering says it should be conducted in a way that doesn't warrant negotiation as this can destroy relationships, though in traditional contracts negotiations are the norm. Many companies are keen to be protected by these contracts in which cash penalties are awarded for late completion and extra works ETC, making the very essence of a partnering agreement obsolete. However in order to help this situation several new contracts have developed for partnering namely project partnering contract (ppc2000) and the NEC engineering and construction contract with the partnering. This will be addressed in more detail throughout the dissertation.

1.1 Aim of Dissertation

The aim of the dissertation is to let the idea of partnering be fully understood, unravelling the opinions and studies of construction professionals and academics alike in order to dissect the advantages and disadvantages that partnering brings to a very unique and important industry. Another aim is to find the best way to conduct partnering agreements and how they can best fulfil their potential including the most suitable contract for partnering.

With such bold targets and predictions set out in major reports by the likes of Latham and Egan a key aim is to discover the opinion of key stakeholders regarding partnering and if they think that the objectives set out in these reports have been successful and have in anyway managed to replicate the success of other industries such as manufacturing. In other words is partnering as good as they say?

As with all things in life matter of opinion comes into fruition and some practitioners have certain criticisms of partnering these cannot be ignored and need to be addressed, different options are correct at different times, some may say " why has it taken so long for construction to join the modern world, it can only be a good thing". Others may say "only time will tell, give it a go" and other will want to give this so called "Buzz Word" a wide birth. Saying this leaves the definite aim to gain a measurement of the success or failure by those involved in construction regardless of their involvement in partnering agreements. I believe this will give a none bias measurement of how far partnering can take you.

1.2 Objectives.

A. To gain an in-depth knowledge of partnering, to fully understand how to put partnering in to practice and be aware of the different types of partnering and the different benefits and drawbacks they may bring.

B. look at other industries to try and gain an insight in to the origins of partnering and the success similar practices have achieved in these industries, and measure if





1.3 Methodology

Do this when lit review is complete.

1.4 Literature Review

*Partnering developed originally in North American manufacturing industries in the 1980s and 1990s as a response to Japan's strengths in key manufacturing industries. It was adopted by the construction industries frist in the USA and then in the UK. These early uses of partnering in construction were directly infulanced by research in to Japanese construction practice. Now partnering is used extensively in western construction industries. It is supported by a substantial body of research that includes case studies of partnering used on individual projects and series of projects*. ( needs changing all copied) This research is published in a number of forms which are; books, journals, code of practices and government reports the aim of this dissertation is to unearth the most relevant information that has reflected the behaviour of the construction industry since the emergence of partnering.

Professor John Bennet is somewhat of a partnering guru who has a great deal of relevant literature published including the "Seven pillars of partnering" and a "code of practice for strategic collaborative working" he and his work needs special consideration and the author will examine this work during the dissertation.

Reports and codes of practices also provide excellent recommendations and evidence of case studies that need to be considered to gain a feel for the potential partnering have. The Latham Report published in1994 brought the idea of partnering to UK construction and really started the ball rolling so this needs special attention as do the Egan reports "Re-thinking Construction" and "Accelerating change" which tackled problems in construction recognized in the Latham Report.

Other authors include Ron Baden Hellard who is responsible for "Project Partnering Principle and Practice". Gill & Mike Thomas the Authors of "Construction Partnering and Integrated Teamwork" and "Clive Thomas Cain the Author of Profitable Partnering for Lean Construction", these are just some of the resources call upon to fore fill the aims of this dissertation the rest will be listed in the references and bibliography.

The origins of Partnering

*The author feels at this early stage in the dissertation he should outline partnering activities within other industries. He feels that this may help the reader to understand further chapters to a higher degree*.( needs changing)

As mentioned in the previous text partnering is not a new concept it has been around in other industries for some time. "Supply Chain Management" is the favourable terminology used in most industries, so what are the fundamentals of supply chain management and can this be adapted for construction industry if so what does it offer ?.

Introduction to supply chain management

There are many definitions of what SCM means and various beliefs in how much an organisation can benefit; simply by lending them self to the best SCM strategy for that particular business, no matter what sector the business belongs to there is always room for improvement. This is not a onetime fix with a standard design across the board for every organisation, as each organisation and industry need improving in different areas but when these improvements are made it becomes highly likely other problems in other areas will arise.

To use GSL a GRP manufacturing company from the south of England as an example; one of the reasons they were able to gain a 25% entry level into a very competitive but lucrative water treatment market is that they noted that rival firms use stainless steel to fabricate the treatment tanks, this very expensive and time consuming to build.GSL decide to make GRP versions, which are quicker, easier and cheaper to build the biggest expense is the moulds used, to save even more money they modularised the treatment tanks making standard sizes this also cuts down on lead times, making their tanks cheaper and quicker to acquire but When they receive an abundance of orders these lead times were not as impressive, a way around this is to outsource production but this will reduce the profit per vessel, but will also reduce overheads and capital costs.(J, Heathcote lecture notes 2010)

This is clearly a complex balancing act that needs to be broken down into pieces, effective management have to coordinate all the pieces of the chain as swiftly as possible keeping costs down, quality up and good relations with both customer and supplier. "The process from the initial raw materials to the ultimate consumption of the finished product linking across suppliers and user companies" (operations management 2002 p.400)

There are many ways SCM can be advantages to an organisation for instance Just in Time (JIT) was introduce and widely adopted by the Japanese with organisations such as Toyota. "The term JIT is used to indicate that a process is capable of instant response to demand without any need for overstocking either in expectation of demand being forth coming or as a result of inefficiencies in the process" (Just in time 1990 p.1).

The prime objective in JIT is to achieve zero inventory, ensure nothing is left to chance, no deficiency no matter how rare is disregarded, this results in a very economical operation saving on space, storage of parts, upping production, reducing faults and maintaining quality at no extra cost. These saving along with the quality guarantee can be passed down to the customer.

The cost of quality like many things in SCM things aren't always as they seem, Upping quality doesn't mean lowering productivity and increasing costs, take more care and less mistakes will be made. Therefore fewer delays, more satisfied customers and more repeat business will more than pay for the extra money put into the prevention costs.(just in time 1990)

Some Advantages of SCM:

Lower supply and storage costs

Smooth flow of goods inwards and out wards

Better inventory management

Powerful delivery scheduling

Lean and flexible operation

End-to-end visibility of supply and demand

A faster response to events in any part of the supply chain

These case studies are proof that the correct management at each stage of the supply chain can save money; improve on quality and increase sales and turnover. This is all achieved by forward thinking, planning and communication with all involved in the supply chain.

Can this be used successfully in construction using a partnering agreements?, well if you take the GSL example it highlights that specialists may have a better design idea on products such as the GRP tanks this will contribute to the overall cost and time savings, then the Toyota example shows with the right amount of planning the correct coordination with suppliers money is saved on inventory and there are far less defects to content with. This shows in principal the concept can work in construction but a major fear of the author is in practice, given the adverse nature of the construction industry this will present substantial barriers to the idea of partnering. This will discussed in further detail though out the dissertation

Chapter 2

Partnering Explained!

2.0 Introduction to partnering

What is Partnering?

" Partnering is a management approach used by two or more organisations to achieve specific business objectives, by maximising the effectiveness of each participant's resources" (Bennett and Jayes 1995).

This can be a very efficient way to commission the design and build of construction projects, from the unique to the more common and repetitive build. The three main types of Partnering are as follows:

1. Project partnering: objective driven, tactical and short term in approach, used on a single project.

2. Strategic partnering: long term alliances that continue across a series of project opportunities.

3. Framework agreements: a hybrid, which packages a series of projects having a known life span.

2.1 The aims of partnering

Though the success of partnering should not just be measured on cost savings it is a good place to start as Rob Bad Hellard states " The successful application of quality management techniques allied to it's philosophy and principles has shown, in industry across the world , that the quality company is the profitable company and that quality investment reduces costs. What is needed is the successful adaptation and adoption of these maximums to the project situation so that all stake holders in the project benefit, not least in the achievement of individual and team satisfaction, and so have fun in the process"- what Deming called ' the joy of work'! (Project partnering pg 3)

In order for this to be achieved then all stakeholders must aim to take full advantage of the value of the assets of each other has to offer, reaching mutual agreed targets that haven't been plucked from the sky but are accurate and achievable for all parties.

Many authors believe a key driving force in successful partnering is the use of the partnering triangle illustrated by authors Bennet and Jayes (1995) model (fig1.)

Figure 1. The three essentials of partnering

2.2 project partnering

Project partnering is seen by many as the first step in the partnering procedure as this is normally for a single project, often this is seen to be an experiment or trial to give stakeholder the opportunity to try out partnering and get a feel for each other as companies and perhaps move into a strategic partnering relationship. When stepping into a project partnering agreement caution should be taken when setting targets on cost and time savings after all partnering is all about continuous improvement which is difficult to achieve when the lessons learnt on the learning curve can't be carried across projects. It should be note that time and cost savings can and have been made as shown in case study 101

Often with project partnering it will start off as one small job, (this is to keep the initial cost of setting up the agreement down, this will be talked about in greater detail in chapter 2.3), if this project is a success the stakeholders have the confidence to enter bigger longer term agreements, and are willing to take and share bigger risks out amongst each other, significantly improving on the cost and time saved on a project compared to the traditional approach, this is moving into a strategic partnering agreement shown in case study 100

2.2.1 Strategic partnering

As Stated in previous text Strategic partnering is done over numerous projects giving the opportunity to have continuous improvement from job to job, using strategic partnering in an effective manor hands stakeholders the opportunity of constant feedback from all involved in the project, taking lessons learned from mistakes made to the next project this cuts down on defects and improves quality, moving towards the JIT approach embraced in the Japanese manufacturing sector. Improving substantially on time and cost on each project embarked upon, this approach also allows a better supply side relationship to develop through time, this cuts down unnecessary cost and improves on quality.

Example of time and cost savings

(Figures Taken from Bennet, J. and Peace, S. 2006)

2.3 Cost & Giving partnering the best chance

An initial investment must be made before any benefits can be reaped by any stakeholder. These costs include; time spent by senior management establishing the approach, careful team selection procedures, and training and partnering workshops. This is another reason strategic partnering is such an advantage, though it makes sense for partnering relationships to develop on smaller projects in order to keep costs down ( Bennet, J. and Jayes, S. 1995).

When entering into a partnering agreement all stakeholders should discuss and be clear on how the project should be run, they should all be positive and genuine about working cooperatively and any concerns should be discussed before entering into a partnering agreement. Parties should all be clear on their own interests and concerns they may have, this may occasionally mean missing out on bad projects but only by being honest and clear from the outset can partnering be a success (Kubal, M.T, 1994).

When all parties concerned with the project are established a partnering workshop should be taken, this is the foundation to developing a cooperative relationship and establishing teamwork. Any party that could have a bearing on the end result should attend these workshops. It should be taken by a independent partnering facilitator specialist as it helps to broaden view's and focus on the projects overall success (Bennet, J. and Jayes, S. 1998)

Mutual Objectives

A set of common objectives should be listed by all parties this helps to encourage a win/win attitude, this focuses all involved to hit targets, achieving goals and produce value for each other. Meaning all parties will make more profit and the client will pay less.

Some mutual targets would be:

In order to maintain successful partnering throughout numerous projects it's a good idea to hold workshops throughout the project and hold a final workshop. This should identify problems and lessons learned by the previous project (Bennet, J. and Jayes, S. 199

2.4 Benefits of Successful Partnering

When looking directly into project and strategic partnering:

Research shows beyond reasonable doubt that, when partnering is used in its purist form the price clients pay for a given building is reduced. At the same time stakeholders and all involved in the project benefit from increased profits and the industry's workforce find their work more rewarding in every sense (Chan 2003).

Some typical benefits:

Reduced exposure to litigation

Enhanced project outcomes in terms of cost, time and quality.

C. Lower administrative and legal costs.

Improved prospects for innovation and value engineering.

Improved chances of financial accomplishment.

Additional Benefits using Strategic partnering:

Continuing cost reductions

Tailored service provision

Client satisfaction

Repeat business

Improved turnover and profitability (NAO 2001)

In more recent years sustainability has become a major factor in the construction industry, others benefit of partnering are sharing technologies and comparing the value of methods used in sustainable construction methods throughout projects, to gain an idea of the most practical way to combat the issues concerning sustainability.

It should also be noted that the benefits of partnering don't just stop at time and budget, when the phrase continuous improvement comes into play then this also means reducing errors this includes accidents and injuries case study 100 is an example of this.

2.4.1 case studies of successful partnering

Measured partnering

Case study Ref: 100

Raynesway construction southern won a two year contract with Hampshire county council; this was based on their performance in previous smaller contracts with Hampshire council. Both parties agreed eight headline key performance indicators this is known as measured partnering.

Benefits the project achieved:

Cost predictability- the number of invoices submitted within 14 days increased from 75% to 88% in turn invoice payments within 28 days increased from 80% to 95% this is a massive reduction in capital cost employed by Raynesway

A 70% reduction in reportable accidents, only 1.5% of 8,000 work orders required remedial works

17% more work was delivered by both parties using the same workforce.

Partnering for social housing refurbishment

Case study Reference: Housing Forum 101 The London borough of Camden used as one off partnering for the refurbishment of 2,500 properties, teaming up with Willmott Dixion and Llewellyn

The main benefits were:

The client saved over £500,000 from a £7.8m budget

Time scale was more accurate with 74% starting on time and 70% finishing on time.

Tenants were a lot happier with less that 1% making complaints.

There were no formal disputes or claims, unavoidable extensions of time and the costs of necessary additional work were agreed quickly in the spirit of partnering

Contractual risks are also reduced by partnering

Case study reference: 102 A high risk project for the construction of the Tunstall Western bypass was completed 10 weeks early within budget and to a high standard of quality thanks to strategic partnering.

Some benefits:

Claims as high as £6M were avoided by risk management and problem solving.

The project was delivered nearly a £1m under budget and all final accounts were resolved within a few weeks of completing construction work, improving cash flow and budget control, all as a result of successful partnering

2.5 Problems with Partnering

At this moment the author feels it to be necessary to talk about the pit falls of partnering. As the dissertation so far really only talks up partnering in such glowing terms it seems too good to be true.

Given the nature of change there is always mixed views, and partnering in no different in its attraction to criticisms. In a review of partnering literature the following criticisms have been identified.

Organisations aiming to establish a partnering culture face severe problems when they have to use cut throat competition to win other projects

Modern forms of decentralised decision-making undermine partnering as decisions by one department are undermined and contradicted elsewhere.

Commercial realities that require firms to have alternative suppliers and many customers inhabit the development of deep partnering relationships.

The open communication required by partnering is inhabited when one partner also works with another partners competitors.

Partnering relationships inhabit firms from developing more profitable new businesses.

Teams responsible for individual projects achieve shallow forms of partnering because the approach takes time to develop.

Forming teams of people who fit the partnering ideal excludes creative individuals, new ideas and distinctive skills.

Powerful dictate terms and conditions to weaker partners who depend on them for future work and so cooperative teamwork is impossible.

Senior managers retain detailed control so that work teams lack the freedom to become cooperative team players.

Partnering is undermined by targets that focus on aspects of performance that are easy to measure.

Partnering is undermined by targets that expect too much too soon.

Partnering in undermined by targets that can only be achieved at the expense of those further down the supply chain.

Attempts to standardise on the most efficient processers and designs undermine quality and value.

Construction professionals only provides feedback that is directly relevant to their own projects

Partnering is undermined when commercial and organisations conditions change.

Strategic collaborative working relationships often mean that individual projects are sacrificed in the interests of long-term development.

These are just some of the drawbacks associated with partnering. Senior managers and academics have many more criticisms but this should serve as a reminder that partnering is not easy and must be worked hard at by all involved, though the evidence is there to prove the massive advantages archived through successful partnering

Case studies 'when Partnering went wrong

2.6 Framework Agreements

Framework agreements are used by major clients; they provide a resource pool of competent consultants, contractors and specialists. They establish a foundation for negotiations over future contracts with a limited number of firms. These are standing offers that remain valid over the life time of the agreements (OGC 2006).

Framework agreements can take a range of forms; they don't have to be binding and don't hold the promise of work for the firms in the pool. The offers can be terminated at any time but contractual agreements must be completed for any individual project already undertaken. If a contract has been entered to purchase a volume of goods or provide a service over a period of time then this must be honoured (OGC 2006).

2.6.1 Advantages

Establish long-term relationships (advantageous for partnering).

Allows specialist buyers to negotiate best value for money on goods that can be used over a number of projects, but used any time.

Gives firms better buying power.

Reduces time spent on procurement and tendering.

Makes reliable after-sales more likely (Bennet, J. and Peace, S. 2006).

2.6.2 Disadvantages

Framework agreements can be unresponsive to change, there may be a better solution developed after the agreement was set up. Often can be a one size fits all approach, however most framework agreements don't place any obligation on any parties so if there is a better deal to be had then there is nothing to stop them. This in turn can be another drawback as there is no guarantee of business so a lot of money may be wasted getting a company into the resource pool of the framework (Bresnen, M and Marshall, N 2000).

When the comparison of a partnering agreement and a framework is made a framework agreement is a step toward partnering but no work is guaranteed, it's more of a root to secure a pool of reliable resources that are likely to gel once in a partnering agreement, this makes the tendering process faster giving more access.

Chapter 3 contracts and procedures

Several standard form partnering agreements are now available for Project and strategic partnering. An example of the former type is the ACA standard form of project partnering PPC 2000. Here, the key stake holders of a project sign only one single integrated contract (no other contracts are needed). Other standard forms for partnering, such as x12 of NEC 3, do not create a multi-party contract. Strategic partnering in contrast, involves developing long-term commitments from both parties in the contract.

The aim is to move the focus of attention away from getting the cheapest or quickest solution for a particular job, and towards developing a longer term understanding of the purposes of the project, and understanding from both parties about what each other what's to get out of the project. These polices have their roots in widespread business practice where long term relationships enables buyers and sellers to avoid litigious disputes because the relationship becomes an important part of the process. The essential feature of strategic partnering is that it provides a method for selecting a contractor (or other supplier) other than the more traditional approaches of competitive tendering. Examples of a standard -form arrangement for strategic partnering are the JCT FA 05), NEC 3 framework Contract and the ICE Partnering Addendum. (Murdoch, 2007)

Any contract used should be of partnering bias, most standard contracts do not facilitate for the idea of partnering, traditional contracts require terms that need negotiating this often destroys partnering attitudes.

Even so many companies seek the protection a contract can give, if this is the case it's reasonably well established that the project partnering contract (ppc2000) and the NEC engineering and construction contract with the partnering are the best options (Bennet, J. and Peace, S. 2006).

3.1 Case studies regarding litigation

Find some case studies for contracts

Chapter 4 Government intervention

In the mid 1990s the government became very concerned about the performance of the UK construction industry. The deputy prime minister at the time was John Prescott, he set up the Construction Task Force, Headed by Sir John Egan to deal with the problem. Obviously the main aim of the Task force was to improve the construction industries performance but in order to do this a report was produced by Egan with ways to combat the recommendations made by Sir Michael Lathem's 1994 constructing the team report. Egan a man who had never been part of construction before this time brought in the idea of "lean" construction and many other ideas from the manufacturing sector, after all he is the man many believe turned the Jaguar car company back into a profit making organisation.

Construction needed to change

The construction task force looked closely into other industries for way to improve, data taken by constructing the team (1994) measures Customer satisfaction (table A)

Requirements Modern car Modern Buildings

Domestic Commercial Industrial

Value-for-money * * * * * * * * * * * * * * * *

Aesthetics * * * * * * * * * * * * * *

Fault free * * * * * * * * * * *

Delivered on time * * * * * * * * * * * * * * * *

Fit for purpose * * * * * * * * * * * * * *

Guarantee * * * * * * * * * * *

Running costs * * * * * * * * * * * * *

Durability * * * * * * * * * * * *

Customer delight * * * * * * * * * * * *

Table A. Performance of construction industry in comparison with car industry

This table shows the construction industry is too far behind the car industry in many areas this is also the case for many other industries.

Some recommendations made by the construction task force on how construction should change:

A fundamental overhaul of the entire industry is needed, including;

Integration of the design and build process

Phase out formal building contracts

Increased standardisation

Use of "lean" construction techniques

An end to competitive Tendering

There are many ways to implement the ideas set out by the construction task force for example;

Standardisation also has an important role to play in improving the design stage of construction. The average car contains about 3,000 components. A house, by comparison, has about 40,000. We see a useful way of dealing more efficiently with the complexity of construction is to make greater use of standardised components.

We call on clients and designers to make much greater use of standardised components and measure the benefits of greater efficiency and quality that standardisation can deliver.

Some examples of standardisation;

Toilet pans - there are 150 different types in the UK but only six in the USA;

Manhole covers - local authorities have more than 30 different specifications for

standard manhole covers;

Doors - hundreds of combinations of size, veneer and ironmongery exist;

There are many ways to standardise components and this can modify into modular buildings Volumetric Ltd designs and manufactures prefabricated units which can be incorporated in a variety of buildings, including Forte's Travelodge, speculative housing and housing association developments, military accommodation, private hospitals and top of the range self-build houses. Advantages include speed of construction, lower cost, reduced need for skilled labour and achievement of zero defects.

McDonald's Restaurants have demonstrated an ability to construct a fully-functioning restaurant on site in 24 hours, using a very high degree of prefabrication and modularisation.

The design allows expansion or even relocation

The ideas listed above are set out in order to achieve the following year on year goals:



per year

Capital cost

All costs excluding land and finance.

Reduce by


Construction time

Time from client approval to practical completion.

Reduce by


Predictability Number of projectscompleted on time and within budget.

Increase by



Reduction in number of defects on handover.

Reduce by



Reduction in the number of reportable accidents.

Reduce by



Increase in value added per head

Increase by


Turnover and profits

Turnover and profits of construction firms.

Increase by


These ideas set up by the construction task force are viewed by many as producing both winners and losers, many believe an environment where competitive tendering and formal contracts are not common place, and standardisation and prefabricated design are to take over then roles of specialist professionals such as architects, engineers and quantity surveyors may become unclear. It is also believed that the buying power that large firms possess will become even greater in a standardised environment will create a huge dived between them and smaller firms forcing them to amalgamate of go out of business.


We recognise that the fragmentation of the UK construction industry inhibits performance improvement. One of the most striking things about the industry is the number of companies that exist - there are some 163,000 construction companies listed on the Department of the Environment, Transport and the Regions' (DETR) statistical register, most employing fewer than eight people.

We regard this level of fragmentation in construction both as strength and a weakness:

• on the positive side, it is likely that it has provided flexibility to deal with highly variable workloads. Economic cycles have affected the industry seriously over past decades and have meant that it has been forced to concentrate more on survival than on investing for the future;

• on the negative side, the extensive use of subcontracting has brought contractual relations to the fore and prevented the continuity of teams that is essential to efficient working.

Egan has clearly looked into this closely and even though their will inevitably by casualty's implementing the ideas of the construction task force De fragmentation appears to be a goal of Egan.

"I don't carry a brief for every company in the industry to survive. I hope they don't i hope the competent ones will very quickly win a slice of the industry and so raise the level of performance"( Contract journal, 22nd July 1998, p12.)

PG 50 the rationalisation of construction

The road Egan is trying to go down is certainly the most logical one, if you cast your mind back to how supply chain management and lean thinking work, If everyone you deal with is competent then this means reducing waste and mistakes. If there aren't as many companies to deal with this make it easier to develop longer term relationships increasing feedback and driving down prices.

In order to kick start these ideas and to ensure that as with many reports of this nature do, it didn't get diluted by the fierce nature of the construction industry. Egan called for at least £500m worth of demonstration projects and the government responded by committing to £1 billion worth of construction projects this shows the seriousness of how the government view this report and the construction industry as a hole.

Chapter 5 How has construction fared

The importance of construction

Comparison of GDP

Construction turnover

Amount of firms

People in partnering agreements

Table 3.2 Insolvencies and bankruptcies of construction firms

England and Wales






Company liquidations

Construction self-employed

Construction companies



Percentage of total



Percentage of total














































































new orders














































































Major injuries












+ 3 day injuries













All reported injuries