Department of Health tops £18bn client spending league

The UK’s top 100 clients bought £18bn of construction work last year, a survey compiled for Building revealed this week.

The survey also showed that the top 10 procured £10.3bn of construction work in 2004, accounting for 13% of output.

The figures were announced at Building’s second annual client convention in London last Friday, which was attended by more than 100 delegates, with seven of the top 10 clients represented.

The biggest spender was the Department of Health, which ploughed almost £3bn into construction projects between November 2003 and November 2004. The department’s spending was more than £1bn greater than that of the Ministry of Defence, the second highest spender.

Graham Farrant, chairman of the Construction Clients Group, told clients at the event that they must use their influence, demonstrated by the figures, to force through reform. He also hit out at the slow take-up of best practice in areas such as integrated teams and modern methods of construction (see below).

Farrant said: “Clients need to challenge the industry to get better quality projects. We need to move beyond best practice pilots into consistent high quality throughout the industry.”

He added: “The best clients are using Constructing Excellence models, but why do some of us require high standards and not others? Some organisations may not have the expertise; the CCG needs to reach out to occasional clients to show them the benefits.”

The two government departments that topped the spending list were followed by airport operator BAA, the highest-placed private sector client. The group’s work at Heathrow Terminal 5 pushed its construction spending to £1.3bn, compared with £1.1bn in 2003.

The Department of Health was the fastest riser in terms of expenditure, increasing its construction output £1bn since 2003.

The ministry also drew admiration from other clients, with NHS Estates taking the honour of “most admired public sector client” for its Procure21 initiative. BAA was the most admired in the private sector.

Farrant said the challenge facing other clients was to follow the lead of these organisations by establishing construction client departments within their companies.

Farrant said: “Very few firms are set up to be a construction client. The most enlightened organisations have set up a construction client within their group, such as the Department of Health’s NHS Estates.”