Spending summit spells out contractor cost-crunch

Aaron Morby 13 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

Inland Homes files for administration

Questions remain over house builder's last two years of accounts
8 hours ago

Council orders developer to tear down tower blocks

Comer Homes told to demolish occupied towers in Woolwich after planning row
16 hours ago

Bouygues UK restructure sees CEO exit

Contractor restructures as Rob Bradley retires
12 hours ago

Barratt to demolish more homes with faulty foundations

Number of homes to be demolished on Cambridge estate rises from 36 to 83
18 hours ago

Steel contractor William Hare edges back to break-even

Revenue slides a quarter to £165m as firm records £108,000 profit
18 hours ago

Willmott Dixon fails to agree final price for Newcastle leisure job

City council looks for new contractor as budgets under pressure
19 hours ago

Bidding to start for civil service’s second home in Darlington

Government Property Agency will invite bids in Q4 for major new Government office complex
1 day ago

Arup and Aecom on board for £1bn Lincolnshire powerline

New high voltage overhead line and substations from Grimsby and Walpole
1 day ago

Plan in for Stansted airport terminal extension

Original Foster design will be replicated in 54m extension towards airfield
19 hours ago

Clients consider options after Westridge collapse

£64m turnover contractor now in hands of administrators
2 days ago

Plans in for 800-bed Leeds student and retail scheme

Major scheme will replace The Core shopping centre in the city
2 days ago

Eric Wright Construction returns to profit

Construction division back in the black as strict contract selection pays off
2 days ago

Balfour boss Leo Quinn backs rainbow lanyards

Chief executive vows "visible leadership" on diversity drive
2 days ago

McAleer & Rushe awarded £60m Barking flats job

Work to start in November on near 200 rental homes project
2 days ago

Lancashire Council awards £300m building framework

Carefoot and Conlon secure spots for major building jobs
2 days ago

Housing contractor Real LSE files administration notice

Real LSE part of group formed in 2021 following acquisition of Rydon contracts
3 days ago

ISG clinches £155m Cat D prison expansion

Firm to deliver 780 new places at three existing prison locations
3 days ago

27-storey Salford student tower approved

540-bed student block to be built on former site of McDonalds' regional HQ
3 days ago

Morgan Sindall £48m Dumfries school job approved

Building work to start before the end of 2023
3 days ago

Pagabo starts race for £1.6bn decarbonising frameworks

Two frameworks are anchored by Great Ormond Street Hospital and Hull City Council
3 days ago

Former HS2 chairmen blast plans to scale back scheme

Fears grow for future of UK's biggest construction project
3 days ago

Redrow plans 1,400 home garden village in Rochdale

Construction on first phase could start next year
3 days ago

Bouygues/Murphy JV tipped for £2.3bn Thames tunnel job

Frontrunner emerges for Lower Thames Crossing 4.2km tunnel job
6 days ago

Subbies facing squeeze as main contractors tighten belts

Pay disputes increasing as suppliers fear major contractors returning to "bad old ways"
6 days ago

Portview takes control of Fulham Buckingham stand

Fit-out specialist steps in after main contractor failure
6 days ago

Firefighters probe cause of Leeds modular scheme blaze

Fire broke out in timber frame office job at Citu's eco development
6 days ago

Manslaughter probe dropped after demolition deaths

HSE to now lead investigation of 2019 tragedy
6 days ago

Vinci/McAlpine JV to start £105m NHS rehabilitation centre

Treasury clears New Hospital Programme job to start main construction
6 days ago

First sign of price falls for construction products

Supply returns to pre-covid levels as demand drops
7 days ago

Three giant lab buildings approved at £700m Oxford R&D district

Phase 2 Oxford North office and lab buildings to deliver 460,000 sq ft of space
1 week ago

Contractor services