Stuart Green is a professor in the School of Construction Management and Engineering at the University of Reading
The phase two report of the Grenfell Tower Inquiry offers little comfort for those who work in construction. The report also highlights systemic failings on the part of the state, not least the damaging effects of deregulation. The government notably failed to amend or clarify the guidance in Approved Document B despite being aware of its misleading ambiguity. More concerning is the finding that the government chose not to disclose the catastrophic results of a large-scale test in 2001 involving aluminium composite panels with unmodified polyethylene cores. Perhaps the most damning revelation relates to the systematic dishonesty of the manufacturing firms involved in making and promoting the rainscreen cladding panels and associated insulation products.
“Tier-one contractors have largely divorced themselves from the physical task of construction”
None of the above should distract from the report’s stark conclusions regarding those directly involved in the tower’s refurbishment. The report is scathing about the extent to which the main participants failed to understand their contractual obligations. It raises serious questions about the use of novation within design-and-build contracts. The contracting parties apparently did not properly understand the nature and scope of the obligations they had undertaken.
Of further concern is that the facade subcontractor only ever received an extended letter of intent, which nobody bothered to read. This did not prevent the offsetting of the installation work to a supposed specialist who relied on self-employed operatives. The level of supervision was such that serious defects in workmanship remained undetected, especially in relation to cavity barriers. There was little concern throughout with the technicalities of regulatory compliance. Construction supply chains more generally are routinely characterised by a lack of clarity relating to who precisely is responsible for what.
Contract trading
The harsh reality is that tier-one contractors have largely divorced themselves from the physical task of construction. The dominant business model is one of contract trading, whereby main contractors routinely subcontract everything. Their competitiveness hinges on managing the cashflow and offsetting as much risk as possible. The approach permeates the supply chain, which often culminates in a reliance on contingent labour. Nobody operates on this basis by choice; they are trapped within a dysfunctional system.
The current system emerged during the mid-1980s in response to the liberalisation of the UK economy. Powerful clients moved away from standard forms of contract that sought an equitable allocation of risk. Notions of equity were abandoned in favour of establishing a single point of responsibility. This shift led towards design-and-build contracts with heavily amended terms. Financial investors were directly implicated by seeking to limit their risk exposure. Elsewhere, the incentivisation of self-employment through the tax and national insurance system had disastrous long-term consequences for vocational training. Outsourcing and deregulation further undermined the sector’s capabilities in technical compliance.
Yet the primary response from policymakers over the past 30 years has been an ever more relentless drive for disruptive innovation aimed at a supposedly recalcitrant industry. Those advocating innovation are routinely celebrated, while those focused on compliance with regulatory requirements are habitually overlooked.
The evidence supporting the above is hidden in plain sight. The Egan (1998) report, Rethinking Construction, mentions innovation 22 times, while regulation is mentioned only four times. Construction 2025 (HM Government, 2013) mentions innovation 43 times and regulation just once. Competence is mentioned only twice. The more recent Farmer (2016) report, Modernise or Die, mentions innovation a remarkable 73 times with regulation referenced just twice. The post-Grenfell Construction Playbook (HM Government, 2022) takes regulation slightly more seriously with seven mentions, combined with a relatively modest 41 references to innovation.
To policymakers and industry leaders:; we need less hubris about innovation, and a greater focus on compliance and regulation. Decisions about materials and methods of construction have long-term consequences. The innovations of today too easily translate into the building safety crises of tomorrow.
