One year on, has the public sector engaged with the government Construction Strategy?
A year ago this month, cabinet office minister Francis Maude announced the government’s intention to overhaul public sector procurement through its new Construction Strategy, aimed at cutting the costs of public sector construction by up to 20%. Launching the strategy, Maude stressed the urgency of its implementation, saying the targeted savings were “not only significant, but long overdue”. The strategy, he said, would “stimulate growth by enabling more to be constructed within the funds available”.
You might think that that left about as little room for doubt as a Euro penalty shoot out. But 12 months on, it seems that the clarity of Maude’s statement was worryingly lost on large swathes of public sector procurers. Startling research for Building’s forthcoming Client Intelligence White Paper shows that, of 110 public sector clients surveyed, three-quarters are not planning to change the way they procure as a result of the strategy or don’t know if they will. The implications of this are alarming for an industry which, in the absence of private sector recovery and amid continuing uncertainty over the impact of the euro crisis on investment, is still heavily reliant on a shrinking public sector workload.
Twelve months on it seems the clarity of Maude’s statement was worryingly lost on large swathes of public sector procurers
If industry is to invest in new methods of working – such as BIM technology, standardised designs and the new pre-qualification system – it needs to know that this will give them an advantage with the vast majority of public sector clients, not just the most clued-up procuring bodies. And this widespread adoption, of course, is also the only way the public sector is to reap the benefits of the cost savings envisaged by Maude.
The work done by leading public sector clients and their supply chains on adopting the strategy will take centre stage at the first Government Construction Summit, taking place in London next week - which will provide a high-profile platform for progress to be shared. But for the strategy to really have the impact Maude envisaged those lessons need to be spread across the wider public sector - quickly, and convincingly. It appears the new construction adviser has their first task lined up.
Another sad day for our industry
The appointment of administrators to Doyle Group last Thursday was the latest sign of how tough the market remains, for contractors in particular. The fact that the business, which counted many of the industry’s biggest contractors among its customers, could not see a way out of the woods is just the latest indication of how cut throat the market has become. Particularly as in chairman Stef Stefanou, the business was run by someone who prided himself on long-standing personal relationships in the sector.
According to the administrator the company “struggled to get customers to pay on time”, a problem that will resonate with many. It is a stark reminder that the kind of day-to-day cash flow measures, such as fair payment terms, long campaigned for by groups such as the National Specialist Contractors Council, have never been so critical.
Sarah Richardson, editor
Building’s Client Intelligence White Paper is a guide to the spending intentions and outlook of the most important public and private sector construction clients.
To pre-order the white paper click here..
Francis Maude is a keynote speaker at the Government Construction Summit, 2 July, London, organised by Building in partnership with BIS and the Cabinet Office.
To book your tickets click governmentconstructionsummit.co.uk.