Olivia Perkins, Morgan Sindall Infrastructure’s Managing Director, sits down with our Restructuring Advisory Director, Simon Baggs, to discuss the landscape of the UK’s infrastructure sector.

Q1: How would you characterise the state of play for UK infrastructure?

Olivia Perkins: Overall, I think we need to acknowledge that it’s been a challenging five or so years for the entire infrastructure sector.

We’ve had some major projects that haven’t run to plan – HS2 is perhaps the most salient from my perspective in rail – and the sector is working through the implications of that. It’s important to note though, that in evaluating the impact of the very largest projects, we risk overlooking that there are many schemes – including renewal and smaller enhancement schemes – that are being completed with great success.

Overall, we’re still a sector of the UK’s economy that is delivering some amazing schemes and some world-class pieces of engineering, underpinned by our rich heritage and real depth of talent and experience in our workforce.

Simon Baggs: I’d absolutely agree. Particularly at the large end of the project scale, demand is driven by government policy, and there’s been a trend in UK infrastructure for some time now of ‘feast and famine’.

Having projects end, particularly big ones, without replacement work lined up, can damage supply chains over time.

If businesses can’t plan consistently, then they’re forced to adapt or move to areas or countries where a steadier stream of work is available. Or, in the worst cases, they simply won’t be able to keep trading – leaving gaps in what can be very specialised areas, which then hinders the sector’s ability to capitalise on new opportunities when they arise.

Q2: What do you see as the biggest challenges for the sector?

Olivia: I have talked about talent before. We have great people, but a challenge is continuing to drive interest in the industry, and then retaining talent effectively.

The good news is there are changes afoot within the industry that I think will help make a real difference when it comes to its attractiveness. It is becoming less common to be told on a Friday night that although you’re currently working near home, you’ll need to switch to a project 200 miles away on Monday, and off you went –upending your life somewhat as you have to stay away from home.

There are still some specialities that are quite itinerant – for example, tunnelling roles – but on the whole, businesses are having to consider being more location-focused when it comes to pipeline targets to support the work-life balance of its employees. This is positive for our people and teams and will help support the resilience of the sector overall.

Simon: I think there’s also a challenge when it comes to retaining the most senior experience. In the absence of work consistency, which we referred to previously, this can cause a brain-drain of the most talented staff.

Expert engineering and project management talent is critical to delivering projects on time, to budget and to specification. Speaking from my world, it’s also essential for spotting pressure points well before they arise, and taking the right action if cracks appear in a project or an organisation.

Olivia: Like any industry, to develop top calibre managers, you have to help them gain experience and be tested at a high level, at different stages of a project cycle and on different types of projects.

As Simon said, we need to support our people while they develop through training and mentoring, sharing the experience of those who have many years of experience and support collaborative behaviours. We need to have continuity of workload in our industry to provide opportunities to our people, needing a pipeline and continuity of major projects alongside a plethora of smaller and medium sized projects within regions to facilitate this.

Q3: What do you think would help the sector build its resilience, and unlock further growth?

Olivia: When it comes to resilience, I think the most important thing we can do is to be better at knowledge transfer.

When projects or activities don’t go to plan, for example, where certain delivery models aren’t proving to be commercially viable for those involved, I think we can do much more to collectively talk about this and get to the root of what isn’t working. I’ve seen great examples of honest reflection leading to much improved results.

I think we also have an opportunity to apply cutting-edge technology more effectively. As a sector we are not getting the most out of digital tools. There are certainly pockets of excellence, but more is needed which can help identify and manage risk of all kinds.

A reason for this is because there are relatively limited opportunities to actually test new approaches, including digital solutions, in a live environment. For example, it’s usually only the very biggest projects that have a distinct innovation budget that contractors can draw on, and the underlying commercial model of the sector means investment in digital tech outside of actual projects isn’t viable without a visible and secure pipeline of schemes.

What brings both of these points together is that we all need to be open to change. It would be great to get to a point where a ‘fail fast, fail often’ mindset was supported to really drive innovation, removing unhelpful bureaucracy from the process, and learn what’s going to deliver the best results.

Simon: As we’ve both touched on, it’s really difficult for firms to plan effectively if they simply don’t have an idea of what’s coming next. A constant stop-start cycle negatively impacts everything from cashflow to supply chain resilience and talent retention.

In addition, as with any industry, it is important to learn from previous projects to make processes better and reinforce that resilience.

We know from our recent report on the future of UK construction that companies want to see further clarity from government on national strategies in areas from industry to energy and transport. No doubt the sector will be hoping to hear more about this.