HomeGreening the economyThe construction industry really can ‘build back better’

The construction industry really can ‘build back better’

dewars laneWhen production at Dewar’s Lane Granary in Berwick-upon-Tweed came to an end in 1985, the historic building was left empty and abandoned, and earmarked for demolition. Reflecting the state of the old granary, much of the surrounding downtown area also started to deteriorate. It was only years later, when the history of the area was appreciated, that the granary was carefully and sympathetically restored. A beautiful new space emerged, using many of the materials already there, and the building found a new use, as a youth hostel with state of the art facilities. This, in turn, has stimulated further regeneration throughout the lower town.

Failing to value our buildings is bad for  people and the environment
Unfortunately, the preservation efforts made to revive Dewar’s Lane Granary are an exception. We regularly lose buildings that have long been part of the landscape of local communities, causing unsettlement and a permanent loss of heritage.

This is a loss, as local history and memories are swept away. But failing to preserve existing buildings, demolishing and replacing them with new ones also results in huge environmental impact. Construction involves highly carbon intensive processes, in the making of glass, steel and concrete, with nearly half of emissions generated outside the UK from the extraction and production of construction materials. Failing to futureproof existing buildings also leads to vast emissions from heating and energy use, given that two thirds of UK homes have poor efficiency, with EPC band D or lower.

Negative impacts go beyond those on the environment. Many of our existing buildings still in use are also running woefully inefficiently, as anyone living in a thin-walled house built in the 1960s can tell you. This isn’t good for people. Apart from the discomfort and expense of running them, cold buildings have a high societal cost, as they are estimated to have caused 17,000 premature deaths last winter and to add £1.2 billion a year in costs to the NHS.

Digital solutions can improve the sector’s performance
Like all sectors contending with enormous losses from the pandemic, construction has got to find ways to make a strong and positive comeback and doing more to address these issues opens up new possibilities. The phrase ‘build back better’ is being used about the recovery in general, but nowhere is that more obviously relevant than in construction. And it is starting from a low base. Productivity in the sector has not improved substantially for over 25 years, lagging behind that of sectors like manufacturing and services, and the industry is a long way behind others in using new digital technologies to up its game.

Over the past two years we have been exploring, on behalf of our Tech Task Force, how digital technology can help to improve the performance of different key industries. After looking at the opportunities in the transport and energy sectors, our final exploration, published today, looks at the potential for the buildings sector.

What we have found are exciting digital innovations that could be used to transform the industry, from designing buildings differently, to making their upgrade and reuse easier. Yet, while digital technology is being used in the early stages of design and construction, so far it’s been underused during building operation, maintenance and deconstruction. Even at the design and construction stage, much more could be done, especially to reduce embodied emissions. This points to big opportunities for improvement. We estimate that adoption of digitally enabled low carbon solutions more comprehensively throughout the lifecycle of buildings could help cut emissions generated by the construction sector in the UK by as much as 40 per cent by 2025.

Digitally solutions could help revitalise the industry after coronavirus
With 80 per cent of the buildings that will exist in 2050 already built, upgrading existing buildings for net zero present a huge opportunity for the sector. Digital technology will be vital for this, making building renovation and upgrades more cost effective and efficient. For example, solutions such as Energiesprong, which deliver net zero homes in one step, use laser measurements, combined with offsite manufacturing to improve the accuracy and efficiency of the interventions. And adoption of digital ‘material passports’, already in use in the Netherlands, and their integration in ‘digital twin models’, replicating a building’s features and operation, will be vital to track resources used,  to help preserve and repurpose them.

Promoting digitally enabled retrofits would also help to boost the construction sector’s low productivity and create more, highly skilled jobs across the country. Firms that use high tech, offsite manufacturing in this way have achieved up to 75 per cent higher productivity compared to conventional construction methods.

But these opportunities will not materialise without policy change. To revitalise the construction sector after the crisis, step up its productivity and create more employment, the government should help bring the industry further into the digital age and ensure it invests in the solutions that will be in high demand as world economies decarbonise.

Our recommendations are:

  • End the madness of a tax regime that sees zero VAT on new build but 20 per cent VAT applied to repairs and renovation. This is a big discouragement to keeping valued and valuable buildings, and is environmentally regressive.
  • Allocate £300 million to develop and scale up supply chains for digitally enabled retrofits and help to kickstart a bigger market
  • Include the very sensible requirement for whole life carbon assessment and reductions for buildings, and work with industry to increase the use of material passports and digital twins for better resource management.
[Image of Dewar’s Lane Granary courtesy of Camerons Strachan Yuill Architects (formerly Bain Swan Architects), by Allan Swan]