Playing it safe: Frameworks can steady the construction ship in these choppy waters

The construction industry is no stranger to uncertainty, but the level of uncertainty we have been observing in recent weeks across the sector is probably the highest since the early days of the pandemic. A combination of tightening finances, continued insolvencies and a persistent skills shortage has created an environment where risk appetite is lower than ever.

Given the long run-up to the Budget in late November and the new procurement regime still bedding in, contractors and consultants have been operating cautiously. This level of prudence is understandable and sensible for many, but the sector needs to remain alive to how it is reshaping competition across the market.

Now is the time to begin delivering meaningful outcomes. The Budget provided some much-needed clarity, which should inspire an increase in decision-making, commitment and stability across the public and private sectors.

Fewer bids on tenders can leave clients with limited choice and potentially lower value for money – and it is in this context that procurement frameworks are increasingly vital – providing a stable and transparent route to market that helps projects to progress despite the challenging headwinds.

The S&P global purchasing managers’ index for the sector showed that construction activity shrank for a ninth month in a row, with many respondents reporting that big investment decisions were on hold until after the Budget. Meanwhile, monthly insolvency figures have highlighted that construction is among the hardest-hit sectors, reinforcing the need for a cautious approach for many.

Layered on top of these financial pressures is the ongoing struggle to find – and retain – skilled workers, with different pockets from consultancy through to practical retrofit delivery and energy specialism across the sector in great need of filling the gap. Latest data from the RICS illustrates this well, with nearly one-third of respondents describing the shortage of quantity surveyors as “critical”, while half said it is reducing work capacity and output.

The skills gap is not new – and it will take more than a silver bullet to fix. In the case of quantity surveyors, the RICS report details the root cause being retiring staff not being replaced by new entrants quickly enough.

Government interventions such as V levels and apprenticeships for under 25s for SMEs being fully funded are welcome but will ultimately take time to feed through – but we also need to examine how to upskill and develop those already in the sector too. There is no one silver bullet, but rather a plethora of tactics that need to combine to create a solution – and in the meantime, constrained workforce capacity will directly limit what organisations can realistically deliver.

Frameworks have emerged as a vital route, reducing uncertainty by connecting clients with pre-qualified suppliers in a transparent and compliant way

This perfect storm of financial and skills pressures has seen the market shift towards risk aversion. Smaller and medium-sized firms, in particular, are wary of taking on projects that may threaten margins or delivery schedules – and therefore their bottom line. The knock-on impact here, however, is felt by clients, who see less competition for their tenders, with fewer bids and often conservative pricing – especially if exploring a more traditional single-stage procurement approach.

In this environment, frameworks have emerged as a vital route, reducing uncertainty by connecting clients with pre-qualified suppliers in a transparent and compliant way. Contractors gain a structured, predictable environment, while clients can access the right expertise and competition levels with less risk – with clarity and transparency only enhanced through procurement reform earlier this year. And indeed, it is fair to say that in 2025 – and going into 2026 – construction firms are more geared up to be on frameworks than not.

Frameworks also offer a platform to make a difference through projects too. Delivering social value through works is a growing priority for government – highlighted specifically by the Procurement Act building on the principles of the Social Value Act (2012) and shifting award criteria from most economically advantageous tender (MEAT) to most advantageous tender (MAT). In theory this means that public contracts can be awarded based on a combination of price and social value, not just the lowest price – something we have long championed and advocated at Pagabo.

The key is pragmatic implementation: impact needs to be meaningful, locally focused, and measurable. Done well, frameworks guide clients in targeting investment where it delivers the greatest effect and how to deliver with best practice – turning social value from a compliance exercise to a genuine driver of impact.

As I have already touched on, most construction firms are already geared up in some way to operate through frameworks. Fixed overhead and profit (OHP) models create predictability on both sides: suppliers gain steady, structured work with agreed margins, while clients get transparency, economies of scale, competitive tender responses, and faster procurement cycles.

Amid these uncertain waters, frameworks stand as a sturdy ship for the sector – ensuring fair pricing, consistent delivery and greater confidence that projects will be delivered on time and on budget. All being vital to rebuilding the sector’s productivity and confidence levels hand-in-hand. The public and private sectors have a role to play in creating effective partnerships and sharing risk, which will ensure a financial return on investment and social legacy regardless of where the investment is sourced from.  

Frameworks make sure that projects do not just get built, but they leave a lasting benefit for companies, clients and communities alike

Even a month after the Budget, much of construction’s uncertainty is unlikely to evaporate. In a market where this uncertainty and a level of hesitance is another post-pandemic “new normal”, frameworks offer more than just a safe route to delivery. They provide a way to keep the industry moving forward with fairness and purpose.

With the OBR reducing expectations for productivity growth by the end of the forecast, a good example of private enterprise backed by public ambition must be set and be further supported by the right procurement routes to ensure effective spend.  

By combining stability and compliance, frameworks make sure that projects do not just get built, but they leave a lasting benefit for companies, clients and communities alike. And in turbulent times, that sort of stability isn’t just wanted – it is badly needed.

Simon Toplass is group CEO at Pagabo