Economics and finance of the built environment

Overview

Economics and finance of the built environment covers macro-economics and micro-economics from institutional to firm and project levels. Infrastructure markets and development, PPP/PFI concession contracts, transaction cost and agency theory in projects are particular current foci.

Institutional, market and behavioural perspectives are therefore addressed in project and construction economics and financial management.

Projects

A range of research has been conducted in recent years. Notable examples that illustrate the range include those listed below.

To Develop an Independent and Objective Measurement System for the Evaluation of Operational Performance of Projects. Granham Ive and Andrew Edkins (Principal Investigators. Funded as a Government Knowledge Transfer Partnership between UCL and KPMG.

Open Planning for Operationally Ready Acute Healthcare Estate: a multi-factorial framework. Phil Astley (Principal Investigator) Commissioned under the Health and Care Infrastructure Research and Innovation Centre (HaCIRIC) programme and funded by the Engineering and Physical Science Research Council (EPSRC).

People

Professor D’Maris Coffman
Director of School and Chair in Economics and Finance of the Built Environment 

Dr Stanimira Milcheva
Associate Professor in Economics and Finance of Real Estate and Infrastructure and Departmental Graduate Tutor

Dr Zhifu Mi
Lecturer in Economics and Finance of the Built Environment

Dr Aniket Kumar
Research Associate: Economics and Finance of the Built Environment

Professor Jim Meikle
Professor in the Economics of the Construction Sector

John Kelsey
Lecturer

Outputs

Outputs take several forms: reports to funding organisations and industry, academic outputs and practical guidance for industry. A sample of recent outputs is listed below.

Edkins, A.E., Ive, G. and Murray, A. (2011) Operating the renewed school estate - an empirical insight into cost and PFI. In 17th Annual Conference of Royal Institute of Chartered Surveyors, September Salford.

Ive, G., Edkins A.E., Murray, A., and Rintala, K. (2010) Cost and Performance comparison of PFI and Non-PFI Healthcare Infrastructure in England, 3rd Annual Conference of the Health and Care Infrastructure Research and Innovation Centre. Better Healthcare through better infrastructure. Edinburgh, pp. 88-102.

Astley, P. Open Planning for Operationally Ready Acute Healthcare Estate: a multi-factorial framework. Health and Care Infrastructure Research and Innovation Centre (HaCIRIC).

Park, A., and Glascock, J. L. (2010) Performance effects of corporate real estate on franchise organizations, Journal of Corporate Real Estate, 12 (6), 81-95.

Park, A., and Glascock, J. L. (2010) Sustainable competitive advantage and corporate real estate, Journal of Real Estate Literature, 18 (1), 3-19.

Skitmore, M. and Smyth, H. J. (2009) Marketing and Pricing Strategy, Construction Supply Chain Management: Concepts and Case Studies, (ed. S D Pryke), Blackwell, Oxford, pp. 92-112.

Yu, M. and Ive, G. (2008) The compilation methods of building price indices in Britain: a critical review, Construction Management and Economics, 26, (7), 693-705.

Rintala, K., Root, D., Ive. G. and Bowen, P. (2008) Organizing a bidding competition for a toll road concession in South Africa: The case of Chapman's Peak Drive, Journal of Management in Engineering, 24, (3), 146-155.

Chang, C-Y. and Ive, G. (2007) Reversal of bargaining power in construction projects: meaning, existence and implications, Construction Management and Economics, 25, (8), 845-855.

Ive, G. and Chang, C-Y. (2007) The principle of inconsistent trinity in the selection of procurement systems, Construction Management and Economics, 25, (7), 677-690.

Smyth, H. J. and Edkins, A. J. (2007) Relationship Management in the Management of PFI/PPP Projects in the UK, International Journal of Project Management, 25 (3), 232-240.

Skitmore, M. and Smyth, H. J. (2007) Pricing Construction Work: A Marketing Viewpoint, Construction Management and Economics, 25, (6), 619-630.

Ive, G. (2006) Re-examining the costs and value ratios of owning and occupying buildings, Building Research & Information, 34, (3), 230-245.

Ganesan, S. and Kelsey, J. M. (2006). Technology transfer: international collaboration in Sri Lanka, Construction Management and Economics, 24 (7), 743-757.

Edkins, A. J. and Smyth, H. J. (2006) The Imperatives of Trust in PPPs: Evaluations from the provision of 'full service' contracts, Journal of Construction Procurement, 12, (2), 142-157. 

Impact

There has been substantial engagement with government, industry and its stakeholders to improve understanding, monitoring and performance, advisory committees, reports, action research and improving best practice, as well as indirect influence through teaching.

The implications of the Private Finance Initiative (PFI) have been one specialist area of impact.

From the launch of PFI in late 1992 the use of this procurement system has had profound consequences. From 1994, when PFI was still emerging as a practical procurement methodology, Graham Ive commenced the initial work in this area has been an active in both leading and encouraging research in the topic to date.

The consequential impact of this collective body of work has influenced the understanding and actions of a broad range of players via both the written outputs (books, journal and conference papers, and reports) and the seeding of key individuals in positions of influence around the world and in the UK. This impact has been acknowledged by engagement with international organisations such as UNESCO, overseas and UK governmental bodies and agencies (such as New Zealand National Infrastructure Unit, in the UK - DoH, DfE, HM Treasury's Infrastructure UK, Local Partnerships), engagement with the UK's National Audit Office, and the direct and indirect influence on a range of commercial organisations via close working with key players such as the Construction Industry Council (representing the construction sector's consultancy fraternity) and KPMG.

Many other organisations have been impacted by the research-driven work on PFI. These include a number of major UK construction players (Skanska, Bovis, Land Securities, Vinci) as well as more than 20 UK local authorities which were procuring complex projects based on the principles of PFI (estimated total of projects being procured that were influenced by this work is £5bn). Finally, the impact of this work led to a major award by the Association for Project Management in 2009 for the most significant contribution to the development of project management.

The timeline is as follows

1996-1998: Original Partners in Technology grant (awarded to Construction Industry Council /UCL), during which time "The Constructors' Key Guide to PFI" (reprinted 3 times and translated into Japanese) and series of invited keynote addresses (Institute of Civil Engineers, Royal Institute of Chartered Surveyors) and: 1998-2000 Partners in Innovation research grant (awarded to Construction Industry Council/UCL, during which time 'The Role of Cost Saving and Innovation in PFI' and a number of journal/conference papers were published.

2000-present: Significant student recruitment from those particularly interested in PFI/PPP to the MSc Construction Economics & Management including one highly successful PhD student.

2000-2007: Research based work in the area of PFI also led to the recruitment of a member of the UCL PFI research team (Dr. Andrew Edkins) to a PFI/PPP company (UKDS now named Kalyx) senior position from which he subsequently returned after four years to establish an Executive MSc course that drew heavily on the principles and practice of PFI and more generally Public Private Partnerships (PPPs)

2007-to date: Winning a 5-year contract with 4ps (now Local Partnerships) to design and delivery a competency development course for local authority PFI/PPP project directors in charge of the procurement phase - the Project Directors Development Programme. This went on to win a major award in 2010 from the Association for Project Management (most significant contribution to the development of project management during 2009) 2007-to date Recruitment of PFI PhD student into KPMG and the establishment of a critical link to KPMG.

2009-2010: Improve the procurement management of at least 30 PFI/PPP projects with a combined value measured in the billions of pounds) with savings of time, cost, and wasted effort.

2009-2011: A Knowledge Transfer Partnership (KPMG/UCL) that has resulted in two

Masters student internships at KPMG, establishment of an 'industry club' with 16 major facility management companies actively participating KMPG/UCL reports, broadsheet press coverage on the KTP work, and contacts within government (HM Treasury, Department for Transport, Department of Health, Department for Education).

Some of the key outputs not listed earlier include

KPMG International, Global Infrastructure (2010) Operating healthcare infrastructure - Analysing the evidence. Available at the KMPG site.

KPMG International, Global Infrastructure (2010) The impact of school renewal - Analyzing the evidence.

Ive, G., Edkins, A. E. and Milan (2000) The Role of Cost Saving and Innovation in PFI, Construction Industry Council, London.

Ive, G. and Edkins, A. E. (1998) The Constructors' Key Guide to PFI, Construction Industry Council, London.