After five years and more than £2bn worth of projects, the government’s Procure 21 programme is at a pivotal turning point.
The 11 firms on the Department for Health framework exclusively bidding to upgrade the NHS Estate are split right down the middle – those who win work and those who don’t. And the strain is beginning to show.
“There just isn’t enough work in the pipeline, and when big contracts do come up, it’s likely that Laing O’Rourke will win them,” says the boss of one Procure 21 contractor, tellingly. You only have to look at the numbers to see that four firms are winning the main bulk of the work. There has always been scepticism that there would be enough work to go around, that firms would really pool project innovations with the rest of the framework to drive down costs and that rival firms would work together in consortiums.
Over the past few weeks, management consultants employed by the Department for Health, which is taking ownership of the scheme after much uncertainty about its future, have been talking to the framework contractors and evaluating the scheme’s success. The DoH is about to decide whether to run Procure 21 for another five years, and how it can be made to work better. This can’t come soon enough for those firms who have little to show for the £160,000 a year they pay to remain on the framework. For the likes of Laing O’Rourke and Kier, who are at the top of the “contracts won” league, it is easy to argue that they simply devote more resources to making sure they have a sufficiently profitable workload. The rest must decide whether they throw more resources at the problem or decide it’s time to call it a day. This is particularly pressing given the general concern over the pace of health spending at present. After all, there is plenty of other work to go round.
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Tom Broughton, deputy editor