Outcome:

Cost certainty

One of the Construction Playbook's 14 policies is Benchmarking and Should Cost Models. Alongside significant progress achieved by the DfE's construction frameworks, evidence from the New Prison Programme identifies the cost certainty benefits of an industrialised approach aligned to a benchmarking and should cost model.

It's important to note that monetary productivity metrics alone can be misleading, however this is the predominate way productivity is currently measured (e.g. £/hour or GVA/hour). These metrics do not accurately account for inflation and are dependent on the accuracy of the Tender Price Index (TPI) as well as market factors and specification variance (e.g. increased MEP complexity or cost density between projects).

A good example to illustrate this is installing a gold-plated tap would result in a higher productivity level than a chrome tap. Despite a similar installation time, the higher cost of a gold tap would result in more £/hour delivered.

Recommendation

While the ratio of capital cost to hours worked on site is a useful, quick and simple metric for obtaining a broad understanding of overall project productivity, we would recommend that a combination of metrics (such as those in this report) are used to track and compare construction productivity to enable better data-based decision making.