Overview of the United Kingdom construction industry

The UK construction industry is an internationally recognized industry as one of the largest in Europe and serves as a world-class benchmark for most developing and other developed economies (Department for Business Innovation & Skills, 2013). The industry further contributes nearly £90 billion (6.7%) in added value to the UK economy, covers over 280,000 businesses, comprising some 2.93 million jobs which translate to about 10% of the total UK employment (Department for Business Innovation & Skills, 2013). The UK’s construction industry key performance indicators (KPIs) ensured that industry performance, client satisfaction, quality, cost and health and safety indicators are achieved. This notwithstanding, the Construction Products Association (CPA) (2017) informs of the current down surge and the slow growth of the industry, reaching its lowest in the last six years. This the CPA attributes to the run-up to the UK’s exit from the European Union (EU) (CPA, 2017). The UK construction sector is made up of three main sub-sectors, namely the construction contracting industry, the provision of construction-related professional services and construction-related products and materials. The nature of activities, their size relative to the gross value added (GVA) and level of employment are presented in Figure 9.1.

Overview of the Australian construction industry

Similar to the UK construction sector, Australia’s construction industry is described as a major driver of economic activities (Al Group, 2015). It is also the

Contracting

2,030,000 jobs 234,000 businesses £63 billion GVA

Services

580,000 jobs 30,000 businesses £14 billion GVA

Products

• 310,000 jobs 18,000 businesses £13 billion GVA
• • Construction of buildings e.g. commercial, residential
• • Civil engineering e.g. roads, tunnels, bridges, utilities
• • Specialised construction activities e.g. electrical and plumbing installation, demolition and site preparation, plastering, painting, roofing etc.
• 1» Architectural & quantity surveying activities
• • Wholesale of wood, construction & materials
• • Wholesale of hardware, plumbing & heating equipment
• • Renting & leasing of construction equipment etc.
• • Manufacture of construction products & materials:
• • E.g. bricks, tiles, cement, concrete products and plaster
• • Metal structures, doors and windows of metal, carpentary and joinery etc.
• • Wiring devices, electric lighting equipment etc.

Figure 9.1 Composition of the UK construction sector.

Source: Department for Business Innovation & Skills, 2013

third-largest industry after mining and finance sector and contributes about 8% of the GDP in value-added terms. It comprises over 330,000 businesses nationwide and directly employs over one million people, which represents about 9% of the total workforce. It produces the buildings and infrastructure that are indispensable to the survival of all other industries (Al Group, 2015). The Australian construction industry affects many economic sectors such as manufacturing (materials, equipment components), services (engineering, design, surveying, consulting, lease management) and traditional construction trades. Figure 9.2 presents the industry’s output, size and share of the GDP.

Philosophical basis and policy for monitoring and evaluation in the United Kingdom and Australia

The fundamental philosophy that formed the basis of the introduction of target-oriented planning in the civil service in the UK contributed enormously in the policy of privatizing parts of the public sphere which could be handled as well by the private sector (though on the policy grounds that the restraint of having to make a profit provides an automatic target and measure of accomplishment). This underlying principle is less noticeable in the case of the naturally monopolized sector to private establishments such as the privatization of the British

■ : Construction output (real value added) ---Construction share of GDP (right)

Figure 9.2 Australian construction industry output, size and share of GDP.

Source: Al Group, 2015

Gas (OFGAS) and the British Telecommunications (OFTEL), but in these cases government also set up publicly regulatory bodies ensuring that there is no abuse of the monopoly power given to the companies.

Towards the end of the 1980s and in the early 1990s, privatization policy became an issue of great concern and so was vigorously pursued. This led to initiatives such as “Next Steps". This fostered the setting up of independent or semi-independent agencies that took over blocks of work that had till then been handled by civil service departments. The “Market Testing” was another initiative which tested the tasks of the current performance of civil servants to ascertain whether they might not be done more cost-effectively by the private sector. These policies were the sole responsibility of the efficiency unit (cabinet office). The outcome of this move to privatizing M&E functions was two-fold. First, it enhanced the necessity for M&E in order to accurately account for all public funds and of the necessity also to prove that government investment is worth competition with the private sector counterparty. Secondly, it may make it more difficult for the main department to ensure that adequate M&E is carried out by the required agencies. This is simply because control of authority is not direct as it ought to be, especially in the case of privatized agencies where there is virtually no control at all.

Contemporary approaches were worked out for these M&E activities controlled by the agencies or mainly by private organizations. If the agency could operate as a profit-making organization, the necessity to establish targets would be reduced, but if not (which was the frequent case), it is paramount that the agencies would be given clear targets. This may be difficult most times because in the public sphere, there are frequently several objectives and most times, these objectives are of social policies which are very difficult to quantify. The obscured factor is that agencies frequently have to exercise a coercive responsibility in the quest for public policy and to make sensitive judgments that could affect the welfare of individuals involved. Selecting operationally feasible recital targets in such circumstances would most times be difficult, but very vital if the main department is to exercise an accountability role adequately. Renegotiations of performance contracts between departments and agencies are also essential because these provide grounds for the results of M&E and M&E is likely to be particularly influential. Further experience is still necessary to be gained for the M&E exercise to adapt to its systems in the years ahead.