How Britain can manage risk better to deliver world-class infrastructure
From working more collaboratively to learning from other players in the sector, the built environment could free up resources to enable innovation.
London Power Tunnels takes a pioneering approach to delivery. Image credit: National Grid |
Contents |
[edit] Introduction
In a changing and growing world full of competition, standing still is not an option.
As new economic focal points arise around the world, as capital becomes increasingly mobile, and as companies compete more frequently outside of their home markets, the opportunities for British built environment professionals to deliver world-class infrastructure have never been greater. What's holding us back, however, is the risk of risk.
ICE has produced a short briefing paper, ‘Improving approaches to risk in the built environment sector’, to serve as a reference point for decision makers and promote discussion in the sector on how we can manage risk better.
It draws on the principles for developing new business models that have been set out as part of Project 13, a blueprint for the sector on how this could be achieved, designed by ICE and the Infrastructure Client Group.
[edit] A risky business
Risk is an everyday issue in any economic undertaking. Adopting an approach which manages project risk effectively, however, is an acute problem in construction and the built environment.
The mindset towards risk is inherently conservative. This is understandable given how dangerous the work can be and because of how competitive the market is.
While this means that the UK has cost-conscious contractors who deliver excellent infrastructure at value, over the longer term, this has resulted in an industry constantly under pressure to seek a margin.
[edit] Taking responsibility
This transactional approach has wider effects which undermine the industry’s fundamentals.
With no economic margin comes no development of skills, no room to research, no ability to test bed innovations and an unwillingness to try new things – all through fear they will not work.
What's needed are changes in business practices. Working collaboratively through an enterprise model (instead of treating partners on a project as separate entities to be managed), could have great benefits for the sector. The costs of risk are substantial, up to 50% of the final price paid by the asset owner.
If management and ownership of risk were kept where they can best and most expertly be handled, rather than pushed around, resources could be freed up which could improve the financial health of the sector and free up resources to improve practices and enable innovation.
[edit] Working together, learning together
Beyond business practices, different players in the sector would do well to learn from each other. Internationally companies are adopting new ways of working and building using cutting-edge technology like 3D printing on a scale that the UK isn't accustomed to.
Data is also vital, and can be harnessed through adopting shared frameworks. Indeed, simple standardised methods of measuring project outcomes could enable more straightforward lesson-sharing, avoiding the pitfalls projects have come across and adopting what works.
Pulling together as a sector, with clients and contractors setting aside funds from projects to allow for sector-wide dedicated budgets for research, innovation and skills development would also create space to test ideas outside of active projects.
The result of which would remove some of the concern about projects failing because of new and not well-understood techniques.
[edit] A positive outlook
The UK has an enviable reputation in project management, implementation of safe working and providing long-lasting, safe infrastructure. It's important that the government and the sector shout about these successes while also casting a critical eye over things when they go wrong.
Overall, what's needed is teamwork and evolution to minimise the impact of risk on the successful delivery of programmes and projects.
You can download the briefing paper here: https://www.ice.org.uk/ICEDevelopmentWebPortal/media/Documents/Media/Policy/Improving-approaches-to-risk.pdf
This article was originally published by the Institution of Civil Engineers on 5 December 2018. It was written by ice.org.uk Martin Shapland, ICE Policy Manager. Ref https://www.ice.org.uk/news-and-insight/the-infrastructure-blog/december-2018/improving-approaches-to-risk-in-built-environment
--The Institution of Civil Engineers
[edit] Related articles on Designing Buildings
Featured articles and news
Tackling the lack of knowledge or confidence in heat pumps
The CICV Green Home Festival part of the Edinburgh Fringe.
Home improvements swapped for green energy upgrades
As applications down since and desire to reduce bills up.
Eco apprenticeships continue help grow green workforce
A year after being recognised at the King's coronation.
The Use of Natural Insulation Materials in Retrofit
New paper from STBA with support from SDF.
National Retrofit Hub in partnership with InstallerSHOW.
Permitted development rights for agricultural buildings
The changes coming into effect as of May 21, 2024.
Biodiversity and the built environment digital series
The nature of building, with CIOB and CWP.
A call for prevention and sensitive re-use.
Risks to the long-term effectiveness of the BNG scheme
National Audit Office publish review of Biodiversity Net Gain.
The CIAT principal designer register
Providing assurance and verification of the capability and competence of registered ATs.
Building Safety recommendations and Northern Ireland
The NI roadmap to improving safety in high rise residential.
Specifying rendered external wall insulation for fire safety
How to interrogate the evidence provided to the specifier.
The benefits of writing articles for your organisation
How to create a profile for your organisation and publish for free.
No Falls Week. The importance of safe working at height
What to expect and what is on offer to avoid accidents.
Scottish Government action to reach net-zero targets
Retrofit expert group highlight critical actions needed.
A forward thinking, inclusive global community of members.