To be part of the solution, local government needs to admit it’s part of the problem. So says Richard Briggs, chief executive of Hamilton City Council and LGNZ representative on the Construction Sector Accord Steering Group.
New Zealand’s construction sector provides work for nearly 250,000 people and contributes around $15 billion to our country’s economy each year – but it needs transformational change. Local government needs an effective and efficient construction sector but, just as importantly, the industry needs us to change as well.
‘Construction NZ’ is grappling with skills and labour shortages, poor risk management, unclear regulations and a lack of coordinated leadership. Unless these issues are addressed, they will compromise the sector’s ability to keep pace with the country’s growing needs.
The Construction Sector Accord is an important programme of work to address these challenges. The Accord was launched in April by the Prime Minister, the Minister for Building and Construction, the Industry Accord Development Group and Accord ministers.
I am a member of the Accord Steering Group, which has been appointed to lead the next phase of work. Together with 23 other industry and government leaders from across the sector, we meet every month to oversee the programme and drive progress.
We are now engaging with our networks across the country to ensure we create a well-informed transformation plan that’s supported throughout the construction eco-system.
From a local government perspective, I believe a critical first step for us as leaders is to openly acknowledge we are part of the problem. Poorly-drafted bylaws, overly-complicated planning regulations, and inconsistent regulatory processes between neighbouring territorial authorities cost the construction sector.
Time is money for developers and contractors so delays in processing consents or establishing sustainable procurement systems add cost, uncertainty and frustration to a sector which is vital for our ratepayers.
Continuing to push risk down the supply chain to contractors is not sustainable. It’s a volatile market. External forces and impacts can affect the viability of a fixed-price project. Are we prepared to accept or share that risk with our suppliers to provide certainty and confidence for both parties? Are our governance wings adaptable and agile enough to accept these risks, understanding outdated ways of doing business are increasingly creating risk already?
Are we as local government leaders prepared to acknowledge the part we have played, and continue to play, in impacting the ability of the construction sector to be the best it can be?
Quite simply, we must be brave enough, honest enough, responsible enough and accountable enough to admit it.
If we don’t, we won’t be able to change. We won’t be able to convince our governance wing and our ratepayers of the changes we need to make and why we need to make them.
CONTINUING TO PUSH RISK DOWN THE SUPPLY CHAIN TO CONTRACTORS IS NOT SUSTAINABLE.
We will pay the price for a failing or dysfunctional construction sector. That price will be paid in lower productivity, fewer options for the critical strategic work we need to do, higher prices and a potential shortfall in provision of the key infrastructure we need to look after the wellbeing of our communities.
The Construction Sector Accord signals a commitment from both government and industry to work together to meet the sector’s key challenges.
We are now well into phase two of the Accord programme. The key focus of this second phase is to develop the Construction Sector Transformation Plan by December 2019. The transformation plan will drive and promote the right behaviours in the sector, integrate existing work and new initiatives, have a sector-wide mandate and, when implemented, will have a real impact on the Accord goals.
As regulator and major client, government has an important role to play in supporting the sector. Government has committed to 34 initiatives that contribute to workforce capacity and capability, procurement and pipeline management, building regulations and consenting, risk management and allocation, health and safety, and more houses and better durability.
Industry has committed to four initiatives that contribute to enhanced leadership, collaboration and organisation, health and safety, risk management, and workforce capability and capacity.
As key procurers of activity in building and construction, local government plays a key role in both driving and implementing change in the sector, but let’s look in the mirror.
Hamilton City Council has just called for submissions on changes to make its District Plan easier to work with. We analysed data from almost 2000 resource consents, interviewed applicants, planners, developers and staff and tracked every step of the customer journey to find improvements.
We identified 77 recommendations to reduce paperwork, smooth the customer journey process and, in some cases, remove resource consent requirements completely. It will save our community hundreds of thousands of dollars every year. But it’s just a start.
We formed a Collaborative Working Agreement with Downer NZ in 2013, signing a 10-year agreement to maintain our roads. Both council and contractor staff work closely together, from the same office. We’re providing a more effective, efficient service to our community and getting more ‘bang for our buck’. Similar alliance-type contracts have been established in other council areas.
We’re partnering with government through the Housing Infrastructure Fund to reduce growth impacts on our ratepayers and we’re very supportive of new funding tools and initiatives being delivered by central government.
We work with our neighbouring councils on shared service agreements and joint water management campaigns to reduce costs and increase consistency for our residents.
But we need to do more. We have to do more.
As leaders in local government we need to drive a fundamental mindset change across our organisations about the way we will do business in the future. We must convince our elected members and our ratepayers that we are here to enable, not to regulate.
Let’s admit we’re not doing as well as we could. Then let’s work out what great looks like and make it happen.
The Accord is a fantastic opportunity for the sector and one which can realise incredible benefits for our country. It’s about building trusting relationships, being bold, valuing our people, and acting with collective responsibility.
As the Transformation Plan takes shape, we continue to work together to find ways to improve our sector. I look forward to updating you on our progress to transform the industry for the benefit of New Zealand.
• Richard Briggs is chief executive of Hamilton City Council and LGNZ representative on the Construction Sector Accord Steering Group.
This article was first published in the September 2019 issue of NZ Local Government Magazine.