Architects ‘must rethink business models’ says construction tsar

Architects need to be freed up to do “magnificent placemaking” rather than clocking billable hours on routine tasks, according to the man the government has tasked with transforming the construction industry. 

Keith Waller (pictured), who heads up the government-backed Construction Innovation Hub, said the industry needed to re-think its concept of value to allow practices to transform their business models.

Waller said architects, as well as other sector professionals, had to change the way they did business and place new focus on outputs and products rather than billable hours. 

He said: “If you look at architects, after going through seven years of training, and they’re very creative people, they don’t want to be spending all their time doing routine automated tasks like door schedules for new buildings. They’re things that can be done automatically.

“The challenge there is how do you make sure those architectural practices are sustainable and profitable to do the magnificent placemaking design that they do without having to rely on selling man hours doing routine tasks.”

Waller also said contractors should be making margins of 5% if they are to break out of the boom and bust nature of business which has dogged the industry for years.

His comments come in the wake of a grim 18 months for construction which began with Carillion’s collapse last January and has included Interserve falling into administration while ongoing financial problems continue to dog the country’s second biggest contractor, Kier.

In an interview with BD’s sister title Building magazine published today, Waller said margins of 5% should be in reach of companies collectively turning over billions of pounds.

He said: “The top 20 contractors in the UK make an average profit margin of about 0.5%. That needs to be about 5%. Half a percent is not a business model that is investable.

“That will be delivering better value for money and making those businesses more sustainable and competitive in the long term because they can invest in R&D. I want the industry to be more profitable and more sustainable.”

Waller’s organisation has been given £72m as part of last year’s construction sector deal. The package has set the industry a series of targets over the coming years which include reducing the time it takes to deliver new-build schemes by 50% by 2025 and targeting 25,000 apprenticeship starts by 2020.

He said a key part of the process that needed to change was the pre-construction phase. “No one has ever wasted time at the start of a project by trying to set it up properly. No one’s ever said: ‘I wish we hadn’t bothered’.”

Waller has been working for the government since 2010 and began his career with Taylor Woodrow in 1986 before moving to Costain 20 years later.

For Building’s full interview with Keith Waller click here