Spending summit spells out contractor cost-crunch

Aaron Morby 15 years ago
Share

Cabinet Secretary Francis Maude will today throw down a cost-cutting gauntlet to the Government’s top 20 suppliers.

At a high level summit meeting In London, he is expected to warn that the cancellation of the Building Schools for the Future programme is a grim foretaste of what is to come.

Maude will say that  the Government’s main suppliers must share the pain and expect deep cuts to their existing contracts. The promise is a more plentiful supply of work in the future.

He believes the costs of dozens of construction and professional services contracts can be slashed by billions of pounds.

Ahead of today’s meeting he 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.”

Carillion and Serco are understood to among the top level contractors attending the summit.

The summit will highlight the scale of spending cuts to hit capital spending, but some contractors will argue that greater outsourcing will deliver big savings.

Firms like Interserve, Carillion and Serco are banking on an out-sourcing drive to plug the expected hole from capital spending cuts.

Today Carillion issued a trading statement that said: “We continue to have a large pipeline of contract opportunities, as both public and private sector organisations seek to reduce costs by outsourcing facilities management and other non-core services.

“As we move through 2011 and into 2012 we expect to benefit from an acceleration in outsourcing by central and local government organisations as they come under increasing pressure to achieve the 25% reduction in spending.”

Latest news

10-Year Infrastructure Strategy published

Full details as Government pledges £725bn of funding over the next decade
8 hours ago

Competition watchdog turns attention to civil engineering

Competition and Markets Authority launches study into road and rail delivery
9 hours ago

Mace director joins Wates as Chief Commercial Officer

Pat Fitzgerald to lead commercial strategy at Wates
31 minutes ago

Korean firm buys part built Hackney job from failed Elements Europe

Work can now restart on 21-storey hotel and office development
11 hours ago

Mark Wild radical reset plan to rescue HS2

Senior manager bonuses scrapped and non-permanent labour cutback
15 hours ago

HS2 supply chain fraud claims spark ministerial probe

Transport secretary pledges one-year reset for HS2 to end 'litany of failures'
1 day ago

Lords launch inquiry into Building Safety Regulator delays

Industry asked for evidence of how system is failing: Have your say
22 hours ago

Willmott Dixon director becomes co-owner of local contractor BSN

Nick Gibb targets £100m turnover at Dudley based national contractor
1 day ago

Dry lining boss sentenced after mystery account moves

Court hears of £500,000 in unexplained transfers before contractor went under
15 hours ago

Barhale bags £16m shaft tank for Severn Trent Water

"Final piece in the puzzle" of Etruria Vale upgrade
13 hours ago

Keltbray strikes £30m funding deal for growth

Three-year funding deal to support push into higher-margin work
2 days ago

Take That brother buys steelwork giant William Hare

Entrepreneur Simon Orange seals deal for £350m turnover contractor
2 days ago

Civils contractor LF Solutions files administration notice

£20m-turnover specialist has labour supply arm and own plant fleet
2 days ago

Joseph Gallagher lands £50m green energy deal

Major trenchless construction contract for HyNet North West project
2 days ago

New boss drives NG Bailey to record revenue

Fresh strategy lifts M&E group's order book to £1.6bn
2 days ago

Costain wins vast underground hydrogen storage design job

Firms lands FEED contract for Cheshire salt caverns conversion
2 days ago

Graham gets green light for £70m Glasgow student tower

Construction due to start this year on 25-storey Anderston scheme
2 days ago

New £16bn National Housing Bank to drive 500k new builds

Homes England given new powers to finance stalled and complex schemes
2 days ago

Morgan Sindall upgrades profits forecast for this year

Overbury fitout and construction operations exceed trading expectations
3 days ago

Major project bidders to face ‘British jobs’ test

Contractors to face tougher jobs pledge scrutiny under new procurement shake-up
3 days ago

Green light for £32m Wythenshawe Culture Hub

Construction to start this year on first phase of £500m town centre revamp
3 days ago

Hercules delivers record first half as HS2 fuels growth

Labour supply specialist says HS2 demand climbing with 630 workers now deployed
3 days ago

Private equity firm acquires Hepworth Clay pipes business

Historic UK drainage manufacturer sold by Wavin
3 days ago

Balfour Beatty names new Scottish MD

Nick Rowan to take reins as Hector MacAulay to retire after 40 years
3 days ago

£500m rail deal locks in future for Scunthorpe steelworks

Government-backed deal with Network Rail safeguards UK production
3 days ago

Morrison rides in for £19m mountain bike R&D hub

Flagship Borders cycling R&D hub set for Caerlee Mill site
3 days ago

Revised plan submitted for Manchester landmark towers

400 more flats added to Albert Bridge House scheme
4 days ago

Job losses loom at consultant GHD

Redundancy consultation underway with jobs at risk
4 days ago

Knight Harwood lifts margin to 4.9% as profit hits £6.5m

London specialist sees strong office and luxury resi pipeline
4 days ago

Hampshire launches £150m minor works reboot

General builders, M&E and roofing firms invited to apply
4 days ago

Contractor services