The Role of Government in Supporting the Construction Industry in the United Kingdom

The construction industry is a vital part of a nation’s economy contributing up to 10 percent of GDP. The industry is large and fragmented and often has not been a high priority for national governments. While this in itself is not a problem, it leaves the industry vulnerable in a rapidly changing marketplace. Recently, the UK government has recognised the importance of Construction Industry and has injected a large amount of capital in fostering change in the Industry. It is argued that by adopting a more innovative approach and improving links in the whole industry supply chain to undertake research and development the construction industry would be better placed to innovate and as a consequence capitalise on the challenges and opportunities presented by the national and global market. In the past, the construction industry has focused on cost efficiency as the prime method of improving productivity. Cost efficiency provides a competitive advantage up to a point and can only be achieved incrementally. Advocates of change have recognised that cost reduction and rationalisation must eventually plateau as critical factors are placed in jeopardy by diminishing organisational, infrastructural and other resources. Innovation, on the other hand, can lead to larger scales of growth and provide the ingredients for increased competitiveness and can enhance competitive advantage exponentially. Innovation needs to be a corporate objective in construction organisations and for this to happen the demand for innovative approaches in the procurement of constructed facilities must come from the building clients. The government through a number of initiatives is requiring clients to change their procurement strategies and as a result force the construction companies to adopt more innovative approaches in the construction delivery process. In addition the government is providing leadership in driving a construction research and development agenda. This paper considers the role of the UK Government in supporting the UK Construction Industry. It addresses the significance of construction to the government; examines the stated aims including priority areas of the UK Government’s construction policies and presents the mechanisms that have been put in place to achieve these aims.