Ahead of the Scottish Construction Summit, the infrastructure specialist talks to TERRY MURDEN about raising standards
There can’t be many people in the Scottish construction and civil engineering world who have not come across Peter Reekie and the Scottish Futures Trust, the organisation he helped to create almost two decades ago. He is, so to speak, in with the bricks, devoting his career to its goals of improving the nation’s infrastructure and keeping the country moving.
He was involved in the business case for SFT a year before its launch in 2009, working alongside investment banker Sir Angus Grossart who became its chairman.
“I’ve been at SFT since before the beginning,” says Reekie. “I was the second employee after Barry White and I’ve stayed on, because I love it. I think I’ve been at every board meeting SFT has ever had.”
SFT is a company wholly-owned by the Scottish Government, bringing together the public and private sectors to plan and deliver infrastructure investment. Reekie, who was its first director of finance and then deputy chief executive and director of investments, took over as CEO from White in 2018.
While there are currently discussions on-going about the future of government agencies, Reekie believes that if SFT didn’t exist the economy would suffer.
“We would be worse off. There would be fragmentation, no bridge between government and industry. There is value and power in joining up.”
To that end, he’s among the speakers at this week’s Scottish Construction Summit at the SEC in Glasgow. It is the country’s largest gathering of construction professionals and contractors, expected to attract 2,000 delegates.
The summit takes place against a backdrop of tighter government capital budgets, rising wages, higher costs of materials as well as further energy efficiency and environmental requirements. This has created a “viability gap”
“Inflation has come through, projects take a long time to develop and things planned five years ago are now more expensive,” sauys Reekie.
Does he see any of these pressures easing any time soon? “To get my crystal ball out would be unwise,” he says.
“The reason we are so involved in the construction industry is because it delivers everything in the infrastructure sector.” However, he feels work has to be done to improve the sector’s image, understand its value and raise overall standards.
“There is no lack of enthusiasm from people to come into it, but it feels like it is under-appreciated as a part of the economy that underpins so much development and economic growth.
“We have worked on competence and the skills systems. There needs to be lifelong training to update skills and making the industry one that people want to stay in.
“We do not have a great track record on mental health. We have done a lot on health and safety, by which we mean reducing accidents, but a lot of discussion now is around challenging hours, working from home, how we keep people well.
“We have to understand how our workforce is feeling. It is important for those people but also for businesses. Another question would be: how may of those you recruited five years ago are still working with you?”
His broad mission at SFT is to make the industry more joined up, not only with government, but also within the industry itself and the various trades it embraces, from designers to bricklayers. Beyond that is ensuring common standards and processes.
“If you look back 25 years, all the reports about what needs to change in the industry, you’ll find better productivity, more collaboration, better procurement, skills. We have made real progress on some things but it tends to be in pockets and we have found it harder to turn good practice into the normal way the industry operates.”
In 2022 SFT and the industry formed the Construction Accord which brought the industry and government together to consider if it had a shared view about what it wants “for and from” the construction industry.
“The words ‘for and from’ are important because the public sector sees the construction industry as something that delivers to it whereas we see it as part of the economy that Scotland needs to nurture and be proud of.
“So when the public sector is procuring from the industry it needs to procure, not just from it, but for it and how are we thinking about the outcomes for the industry.
“The accord set up the outcomes we all agreed we wanted for all those in the industry, the clients and the communities in which it works.”
He sees the summit as a good opportunity to bring representatives from across the industry together to celebrate progress consider the challenges it continues to face.
“How do we make sure that in 25 years time people are not talking about the same things? If we all go back to work the day after the summit and do the same things as the day before why would we expect it to be different? Let’s try to get some commitment to small changes from every individual in the room along the directions the industry has set out.”
He wants to see changes in buying practice to move from a transactional one-off approach to more longer term arrangements. Another consideration is UK Government’s Commercial Payments Act which aims to ban ‘retentions’ in the industry, a percentage of a contract withheld until the end of the project to cover for work that may need to be fixed.
While this is done to ensure work is done properly, it means main contractors are holding on to money owed to sub-contractors, sometimes for months and longer and this can jeopardise their cash flow.
Linked to this is the work being done on construction quality. “If the quality of construction was always what it should be and there weren’t any defects then you would not need retentions to make people come back and fix them,” says Reekie.
“If we can get more standardisation in design and more commonality and work with supply chains for longer periods, not just one project, then we can improve people’s skills to deliver and improve quality and change the commercial structures.
“If everybody working on a project is competent to do their task they are more likely to deliver the quality which allows for a different commercial outcome.”
He says competence is more than just about having got the qualifications, it’s about asking “are your behaviours right, are you working well with colleagues, have you been on the half-day course to use the particular tool in front of you?
“This means we can say that this person is competent and the incentives around them allows them to do it to the best of their ability.”
One on-going challenge is companies bidding low to win a project and then not being able to fully deliver it, and possibly taking short-cuts to make their budget. Following talks between SFT and the government new guidance has been issued to procurers. There is a now graduated pricing in the scoring of tenders that removes the incentive to bid low.
“If you bid lower than the average price you do not get more points for it. It pays therefore to get your price right, not as low as possible.
“We have work out what is making companies bid low and if pricing low makes them more likely to win we have to change that incentive”.
On subcontractors being squeezed on price and encouraged to use cheaper materials than originally proposed, he says that failing to align results in not getting the right behaviour. If the specification is written properly it would not happen, he says.
Ultimately, he wants the summit to help embed all these ideas and changes.
“There will be people talking about technical innovations, but my job is about long term stewardship, making change stick. The things we were talking about 25 years ago were not a need for new whizzy technical answers to things it was about knowing what we do well and making it the universal thing that we always do.
“In a fragmented sector we have not been able to embed the good everywhere and really make change across the system stick. If you ask most people at the summit what would make the most difference to them as a business it would be to get the good things they see done everywhere, rather than to make the good things they see even better.
“So, boring as it may seem not to have a big idea, it is much more important for the sector overall to be an agent of sectoral change rather than innovation. There are people of people doing the innovation, and it is important, but our job is to try to have all boats rising together.
“I will be happy if everyone at the summit picks up something they will do differently and goes on and actually does it, and something that they want to work on with others in the industry that they couldn’t do themselves.
“What connections did you make to work with other people to do something differently for the system? If people go away and think it was a lovely day out and keep doing the same things we have not served our purpose.”
The Scottish Construction Summit takes place on Thursday 22 October at the SEC, Glasgow
PERSONAL CHECKLIST
Birthplace: Manchester, raised in Cheshire
Age: 55
Education: Oxford University (Engineering)
Career highlights: Jacobs Babtie (civil engineer); PricewaterhouseCoopers (project finance and comnercial adviser); Scottish Futures Trust
Parental influence: Father was in the construction industry
First job: helping to map the sewer network in Manchester and “going down the drains”.
Out of work interests: Art, birdwatching, woodworking.
Mentors: I’ve picked up lots of things from lots of fabulous people on law, psychology, engineering, politics. I’m a bit of a magpie
Memberships: Fellow of the Royal Society of Edinburgh, Fellow of the Institution of Civil Engineers
Which special guest would you invite to lunch? Rory Sutherland who has ideas on psychology and marketing that make you think differently.
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