Construction has landed one of the first sector deals as part of the government’s industrial strategy to boost productivity across the economy.
The confirmation of the deal for construction comes after the Treasury revealed last week as part of the Budget that it would be earmarking £170m for R&D as part of the sector deal agreement.
It is understood that this government funding will be supplemented by a mechanism that will see construction firms match-fund the money put in by government for R&D and innovation projects.
Also included in today’s industrial strategy is a pledge to give £64m to improve digital and construction training as part of a new National Retraining Scheme.
The move by the government is aimed at tackling low productivity in the UK economy.
Construction is a particularly poor performing sector in this area, with research carried out by McKinsey finding that productivity in the industry was far lower than the UK average and costing the sector more than £15bn a year.
The pursuit of a sector deal has been driven by the Construction Leadership Council, which the industry selected from among 42 sectors of the economy that initially put forward bids for deals in the summer.
Last month, CLC co-chair and Crossrail chief executive Andrew Wolstenholme said construction had a “50:50” chance of securing a sector deal, which he said could be worth £250m.
At the time he said he hoped the sector deal could see firms move from spending less than half a percentage of their turnover on R&D to closer to 2 per cent.
Prime minister Theresa May said: “Our modern industrial strategy will shape a stronger and fairer economy for decades to come.
“It will help create the conditions where successful businesses can emerge and grow, and support these businesses in seizing the big opportunities of our time, such as artificial intelligence and big data, while also making sure our young people have the skills to take on the high-paid, high-skilled jobs this creates.”
Construction is one of the first industries, alongside artificial intelligence, the automotive industry and life sciences, to land funding from the Department for Business, Energy and Industrial Strategy to spend on innovation and research and development.
Source: Construction News