Treasury probes higher cost of UK civils projects

Aaron Morby 14 years ago

Former Arup chairman Terry Hill has launched a far-reaching Treasury review to root out why civil engineering projects cost more in the UK.

Hill will chair a Treasury steering group tasked with unpicking the factors driving higher than expected project costs compared to other European countries.

The eminent engineer will feed his findings into Infrastructure UK, the new Treasury body tasked with drawing up a national infrastructure plan in the autumn.

Mr Hill said that UK construction costs were unquestionably higher than those in key continental competitors such as Germany, France and Spain.

There was, he said, a debate about the size of the gap – some studies pointing to a 10 to 20% difference, others suggesting double the cost on particular projects

The Government estimates that £200bn will be ploughed into major infrastructure schemes over the next five years and wants to strip out unnecessary costs.

IUK will lead work within the Treasury to attract greater private sector investment in infrastructure and improve the Government’s long term planning and delivery.

A Treasury spokesman said: “It is critical if we are to proceed with this investment plan that we identify the cost factors and deal with them.”

The steering group has a wide remit covering areas from the cost of health and safety compliance, through to labour issues and the effectiveness of EU procurement practice.

Hill said: “I am keen to bring my knowledge of large civil engineering projects to the fore and if this can ensure that the UK regains a competitive edge in the marketplace then this work will have been worthwhile.

“Helping to identify the reasons for the higher cost of civil engineering work in the UK is fundamental if we are to build a platform for future development.”

Sir James Sasson, commercial secretary to the Treasury, said: “The review will be critical to ensuring that the Government gets best value from its infrstructure investment spend.

“With the construction industry fully involved in the investigation any benefits to Government should also enhance the competitiveness of the UK industry.”

Government infrastructure spend 2010-15

  • Water/flood £28bn
  • Waste £8bn
  • Transport £69bn
  • Energy £57bn
  • Communications £34bn

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