Institutional reform in British construction: Partnering and private finance

The British construction industry is presently going through a period of rapid change. A combination of government-led reform initiatives, changes in government procurement strategies, and increasing exposure to international competition is focusing minds and shifting positions. This paper provides an analysis of the institutional aspects of these changes, identifying the root of the problems that the reforms are tackling, and indicating what the prospects of success might be. The paper starts with a historical overview of the evolution of what is here called the professional system, which has dominated the British industry for 150 years. This provides the context for the exploration of the two principal forces for change in the industry - the reform of contractual relations, especially the diffusion of partnering, and the shift of government procurement towards concession contracting in the shape of the Private Finance Initiative. In conclusion, the prospects for success are discussed, noting that the British construction industry is relatively successful in international markets, but that it shares many traditional problems of other sectors of British industry - the predominance of personal capitalism has meant a failure to develop organizational capabilities - the most notable symptom being the continuing reliance on self-organizing gangs of workers for actual production.