The second British-Polish Construction Forum took place at NatWest’s Bishopsgate offices in the City of London, bringing together business owners from across the sector. As at last year’s event, participants included architects, contractors and subcontractors, developers, engineers, manufacturers of building materials and other service providers in the supply chain. Although mainly UK-based Polish firms dominated the delegate list, several British firms were present looking for suppliers or clients.
After a welcome and introduction from the BPCC’s Michael Dembinski and PBlink’s Bart Kowalczyk, there was a presentation from the National Federation of Builders’ senior policy advisor, Rico Wojtulewicz, who looked at how Brexit may affect the construction sector. The builders’ trade association is concerned about access to skilled labour after Brexit, given that in Central London around 60% of site workers are EU nationals. That figure is 50% for Greater London, 35% for South East England and 12.6% for the UK as a whole. Given the uncertainty about settled status and lack of clarity on workers’ visas, building employers are worried about insecurity among their EU workers. At the same time, knowing that a skills shortage is looming, the government failed to put into enough training and apprenticeships schemes in place to fill the gaps when it launched Article 50.
“Brexit has already bitten,” said Mr Wojtulewicz, pointing out that the falling pound has resulted in “high increase in material costs. Reinforced concrete bars cost 21.6% more than a year ago.” However, there is hope, as the UK produces 90% of all raw materials used in construction. Mr Wojtulewicz said that not all parts of the sector were affected by Brexit uncertainty equally; “house builders are doing better.” However, only 27% of homes are built by SMEs. There are also marked regional differences. “Construction is the predominant rural employer,” he said. “For every £1 spent, 90p is kept locally.” Concluding, Mr Wojtulewicz said that part of the difficulties facing the sector was the result of the British government interpreting EU state-aid and other Directives too rigorously.
The next presentation, from Geisel Consulting’s Peter Queen, served to remind business owners what they should be focusing on. Based on his long experience working with firms in the construction sector, he observed that too many firms were busy chasing increased turnover, rather than on increasing their profit margin. “Construction is about output, making things; that’s where the profit is, that’s where business owners should focus.” Firms should never ‘buy’ work – putting in low bids, knowing there won’t be profit from the project. Mr Queen advocates the use of Building Information Modelling (BIM) in construction, saying that much of work in building revolves around day-to-day problem solving. “BIM identifies the problems before they ever reach the building site,” he says; “BIM turns the building process from a constant blame game into a team game.” There is profit to be made from quality, and delivering value, he said.
Another new technology that will revolutionise construction is the use of drones, to photograph and measure sites, and eventually, to deliver building materials. Rufus Ballaster and Andrew Firman of law firm Carter Lemon Camerons talked about the legal aspects of drone operation, which are currently quite restrictive. Operators need to keep the drone in their line of site at all time, and stay mindful of the law of trespass, which extends far above any land a drone may overfly. The technology is currently limited by battery life (15-30 minutes), but in future, nano-drones may carry out much of the reconnaissance work around construction. Mr Ballaster gave a case study of a new building with a leaking roof. Rather than set up scaffolding and send up an inspection team with safety harnesses, the builders sent up a camera on a drone, thanks to which the leak was immediately located and dealt with from inside.
Many business owners have to pitch to investors or lenders to secure financing for their projects. Nick Howe, enterprise manager, London & South East, at NatWest Business Banking, gave an inspiring presentation about how to conduct the pitch. Based on his 20 years’ experience at the interface between enterprise and finance, he explained the critical stages of pitching, and the key areas to focus on. These are the Hook – how to grab the financier in the first sentence, defining the problem that needs solving – and how you intend to solve it; the market opportunity and its size; your business model – how you make money by helping your client make or save money; your assessment of the competition and why you’re better, the team of good people you have around you; your achievements to date – the traction your business already has, and finally the Ask – your call to action.
After a lunch hour in which participants networked busily, the second part of the day opened with a presentation about public procurement and the construction sector supply chain, from Patrick Nicholson from Newable Group. He explained how it is possible for SMEs to break into the supply chain, and talked about process of doing so – and the help available. He covered the motivations of buyers in public procurement – the needs (often compliance-based), the wants (a desire to improve) and curiosity (what’s new in the market?) Mr Nicholson explained how pre-qualification works, and how construction firms interested in bidding should keep a file showing their experience, their policies and any certificates they have. He broke down the tender criteria – which include innovation and track-record. Proportionality was another criterion; “no buyer will give you work worth more than 30% of your turnover,” he said. And additionality, the added value that a bidder can bring to a project, is also an important criterion. “Essentially, the procuring party is looking for reliability, efficiency and capacity. They want to see proof of your working style, written policies, experience and integrity. In other words, is your firm fit to supply,” said Mr Nicholson.
Andrzej Manka from UK Construction Week, looked at the future of the construction sector, highlighting the trends and technologies that would change the way we build. He started with a look at the recommendations of the Farmer Review of UK Construction Labour Market, which highlighted the dysfunctional nature of the training funding and delivery model. Worth over £90 billion, 7% of the UK’s GDP, the construction sector is due to grow by 70% by 2025. Technological change, such as off-site construction and the use of BIM will change the nature of the skills that the sector needs. Mr Manka said that it is currently estimated that two-thirds of children at school today will, at some time during their future careers, be doing jobs that don’t currently exist. Hence the training systems needs to adapt – “modernise or die”, in the words of the Farmer Review. Mr Manka showed examples of new uses of materials such as timber for use in super-tall skyscrapers.
Joanna Palinski gave a case study presentation of her own award-winning firm, JP Project Management, which manages residential and light-commercial projects, including interior design, refurbishment, structural projects and maintenance projects. She highlighted to need to stay focused on finding the right projects, confirming Peter Queen’s earlier advice not to ‘buy’ work. She said that construction is generally a “low-bid game”, but stressed the notion of a fair price and the importance of going the extra mile for the customer to exceed their expectations. “Filling a house with fresh-cut flowers as you hand it over to a client,” for example, makes all the difference, she said. Ms Palinski set out her checklist for deciding whether or not to take on projects: Is it a similar project to ones I’ve done before? Is the timeline possible? Can I do this job well? Can I do this job safely? Will I be paid on time? Is it profitable? Will there be a promise of more work?
As JP Project Management markets itself solely on personal recommendations of satisfied customers, she is in the happy position of being able to afford to turn down work if it does not meet the above criteria. But sometimes, she’ll make an exception. “On one street, I had three clients, all wanting work done at the same time. Economy of scale meant I could offer them all a discount,” she said.
Katarzyna (Kate) Bogusławska, partner at Carter Lemon Camerons, offered some practical advice about working with a solicitor. “It’s not just about when things go wrong,” she began, but it became clear that the partnership between a builder and a solicitor starts usually at that point. “The earlier you approach a solicitor in any given matter, the easier and cheaper it will be,” she said. She gave a case study of a developer fighting a restrictive covenant, which was used by a neighbour to prevent him from developing a property as he wished. “We won the case through teamwork,” she said. “Good judgment”, a crucial quality in a solicitor, she said, “comes from experience. And experience comes from bad judgment. It is better to draw on other people’s bad judgment!”
After the afternoon coffee break, it was time for the discussion panel, in which Joanna Palinski, and Patrick Nicholson were joined by Barry Mortimer from the Federation of Master Builders, Piotr Lugowski of Perfect Blinds UK, Maciej Klinowski of health & safety experts Practipol, Andrew Poradzisz of project management software company Archdesk, and representative of Polish Building Wholesale Ltd. The session was moderated by Michael Dembinski, who asked participants for their views about the current state of the UK construction sector, focusing on availability of skilled labour, Brexit, the regulatory environment, building material costs, managing cash-flow and relationships within the supply chain. Planning permission (and the difficulty in obtaining it) was judged as the biggest barrier. Barry Mortimer and Patrick Nicholson explained many of the features of the British planning system, saying that differences across local authorities were often down to short-staffing and poor training. Joanna Palinski surprised everyone saying that among her predominantly male workforce, she employed two female Romanian painters!
The panel discussion was followed by networking. Participants were joined by newcomers who came just for the networking; the group was so large that for the formal 20-second introductions it had to be split in two. This continued for over an hour and half, after which the many actively networking participants moved across the road from the NatWest offices to a local pub and carried on swapping business cards there.
A big thank you to the partners of the 2nd British-Polish Construction Forum, Carter Lemon Camerons, Sami Swoi (OneMoneyMail) and venue hosts/catering providers NatWest, as well as to supporters Buildeo, Archdesk, Neadoo Digital, Best Foods, STP; BC Printing for printing the event materials and to the Polish Embassy for its honorary patronage of the event.
Author: Micheal Dembinski, BPCC