Francis Maude makes ‘procurement pledge’ as 3% output drop drags UK economy into recession

Ministers were set to launch a revised public building work pipeline yesterday, following this week’s revelation that a sharp dip in construction output had dragged the UK economy into recession.

As Building went to press Cabinet Office minister Francis Maude was set to be joined by business secretary Vince Cable on Thursday in order to lay out plans to update and improve the construction pipeline. They were expected to expand the idea into 14 other sectors, and publish a government-industry “procurement pledge”.

The announcement was also set to lay out the details of a pilot programme in the tunnelling sectors designed to use the pipeline to improve efficiency in the supply chain. This follows an analysis that six of the government’s 40 priority infrastructure projects, including High Speed 2 and the nuclear programme, require significant tunnelling expertise.

The publication of the pipeline of government projects, originally launched alongside the Autumn Statement in November 2011, was welcomed by the industry. Sources said this week’s move hinted at the possibility of a more active policy from the government to aid industries that are seen to be a priority.

The announcement was set to come against a backdrop of dire economic news, with construction entering its third recession since 2008 with a 3% fall in output in the last three months.

On Monday this week the Treasury said that up to £1.5bn of cost savings had been identified in infrastructure projects since the publication of its National Infrastructure Plan.
A survey of infrastructure industry bosses undertaken for the Treasury’s infrastructure arm found that while the publication of the pipeline had been helpful in providing greater certainty to the supply chain, the industry had seen little improvement in procurement processes.

Noble Francis, Construction Products Association economics director, said: “It is essential that government does its utmost to switch its spending to more productive capital spending.”

Francis maude will be speaking at the Government Construction Summit on 2 july. Details