Government calls in construction firms to slash contracts

Construction and facilities management companies are to enter crucial talks with government this week over reducing the cost of existing public contracts.

According to the Sunday Times, paymaster general Francis Maude is to summon the 20 biggest suppliers to government to a meeting this week to negotiate “billions of pounds” of cuts to public contracts.

The paper said Maude would focus on four key areas – with technology and professional services also hit alongside construction and facilities management.

Maude said: “I’ll be laying down a challenge to these suppliers to work fast to take out costs. The taxpayer simply can’t afford everything that may have been contracted to them.”

The news comes in advance of an expected announcement today on the issue of committed public spending based on “end of year flexibilities” from other government departments.

This is likely to see funding for the Homes and Communities Agency’s kick start housing programme, which is dependent on securing these funds, cut back.