Construction Board formed to find 20% savings

Aaron Morby 12 years ago
Share

The Government plans to set up a special Construction Board to drive through big changes aimed at finding 20% cost savings on projects.

Francis Maude, Minister for the Cabinet Office, signalled his intention to reform the existing system in the Government Construction Strategy published today.

The report states: “This strategy means that the public sector will become a better client – more informed and better co-ordinated when its requirements are specified, designed and procured.

“The strategy also challenges industry business models and practices. It will replace adversarial cultures with collaborative ones.

“It will demand cost reduction and innovation within the supply chain to maintain market position – rather than innovation that is focussed on the bidding process, with a view to establishing a bargaining position for the future.”

As part of a package of rolling measures the Government aims to phase out lump sum lowest price tendering in favour of procurement methods designed to integrate the supply chain.

This will include using contractor frameworks, where firms will bid against a strict project cost benchmark, and the use of Building Information Modelling. There will also be a strict cost benchmarking across all government projects to seek out savings and best practice.

The new Government Construction Board will be chaired by Paul Morrell, the present construction adviser.

The new board was described as an evolution of the existing Construction Clients Board, but will have a wider membership through Government departments and utility regulators.

It will also oversee the implementation of the Infrastructure Cost Implementation Plan and the government’s responses to the James Review and McNulty Review.

Francis Maude, minister for the Cabinet Office, said: “These savings are not only significant but long overdue. The commitment to reduce the cost of construction by 20% is no small thing, but it will help the Government and the construction industry.

“This strategy will stimulate growth by enabling more to be constructed within the funds available.”

The industry has welcomed the new strategy.

Civil Engineering Contractors Association director of external affairs Alasdair Reisner said: “For many years contractors have asked for greater clarity from government over its relationship with the industry.

“The Government Construction Strategy is an important document as it attempts provide a clear steer on the future direction of policy in this area, particularly in relation to procurement.

Simon Rubinsohn, RICS Chief Economist, said: “Recognising the public procurement system needs reform is the first step and it is now up to all those involved in the process to ensure value for money for taxpayers, efficient delivery of projects and a system that encourages effective collaboration.”

“The new Construction Strategy represents an excellent opportunity for the Government and the industry to work together to ensure value for money across public construction and infrastructure projects.

“Taking into account new developments such as Building Information Modelling (BIM) will help this process along with the move to a more collaborative approach to relationships between the public and private sector.

He added: “The rolling two year forward programme of projects will demonstrate the Government’s ongoing commitment to this process and will provide the certainty needed by the industry to take long term business planning and investment decisions.”

    Model procurement

  • Clients issue a brief that concentrates on required performance and outcome; designers and constructors work together to develop an integrated solution that best meets the required outcome
  • Contractors engage key members of their supply chain in the design process where their contribution creates value;
  • Value for money and competitive tension are maintained by effective price benchmarking and cost targeting, by knowing what projects  should  cost, rather than through lump sum tenders based on inadequate documentation
  • Supply chains are, where the programme is suited, engaged on a serial order basis of sufficient scale and duration to incentivise research and innovation around a standardised or mass customised product
  • Industry is provided with sufficient visibility of the forward programme to make informed choices (at its own risk) about where to invest in products, services, technology and skills
  • There is an alignment of interest between those who design and construct a facility and those who subsequently occupy and manage it

Latest news

Plans lodged for Manchester student tower and offices

Plans lodged for £250m One Medlock Street mixed-use office and student scheme
2 hours ago

Glasgow civil engineer banned for £100k Bounce Back Loan abuse

Sole director handed 11-year ban for falsely claiming two loans for personal gain
7 hours ago

Unite passes union hotel job probe findings to police

Independent reports raise concerns of ‘potential criminality’ around union's £100m hotel and conference centre
8 hours ago

McLaren tops November contracts league

Excel exhibition centre £200m phase 3 wins lifts McLaren to pole position for contract wins last month
19 hours ago

Former Wates CEO joins Mace as new financial chief

David Allen replaces Richard Bienfait who stepped down in September
19 hours ago

M25 to go green under new Shell and Balfour deal

New trial of paving on UK's busiest motorway
19 hours ago

Bidders wanted for £125m painting and decorating framework

Apply now for latest Fusion21 deal
18 hours ago

Robertson wins first MIM-funded Welsh school job

£65m Flintshire school campus project first to use Welsh mutual investment model
20 hours ago

Willmott Dixon wins £130m Broadwater Farm estate revamp

Green light for north London estate transformation
19 hours ago

Materials giant CRH looks to sell contractor Farrans

More than 550 staff set to get new owner
3 days ago

West Yorkshire transport projects delayed to save £270m

Over 30 transport schemes to be placed on hold due to cost inflation budget pressure
2 days ago

Decision on A1 Costain dualling job delayed for third time

Development consent decision for £260m Northumberland scheme put back a further 9 months
2 days ago

Colas wins £140m Cheshire highways upkeep deal

Incumbent contractor Ringway will handover to Colas in April
2 days ago

Skanska to lend staff cash

Contractor links-up with finance firm to offer affordable loans to employees
2 days ago

Ilke Homes pulls off £100m record-breaking fund raise

Largest-ever capital raise by a UK modular house builder to fund expansion
3 days ago

Construction buyers fear for year ahead

"Construction companies now have a tightrope to walk in terms of being ready for recovery and cautious around investment"
3 days ago

Gove calls for competition probe into house building

Levelling Up and Regeneration Bill 'strengthened' with new measures
3 days ago

Schools get £500m for energy upgrades this winter

Extra cash found for better heating controls, insulation and energy efficient lighting
3 days ago

1,000-home North London scheme approved

Developer Hill will start work in the Spring on South Tottenham site
3 days ago

Bid race for £500m Suffolk construction framework

Construction and building services firms called up for East of England four year deal
3 days ago

Mace employs robot dog to avoid slip and trips in tunnel

Robot working in dark and hazardous conditions under Heathrow Airport
3 days ago

Administrator details confirmed at Southampton M&E firm

Begbies Traynor now in charge at Working Environments as suppliers face large losses
3 days ago

Former Galliard chief takes helm at Inland Homes

New CEO Don O'Sullivan sets out to return south east house builder to profitability
3 days ago

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
4 days ago

Industry veteran to head Henry Bros northern arm

Peter Commins, former Kier and Balfour Beatty northern chief, to spearhead growth drive
3 days ago

Housing association shuts in-house modular factories

Swan closes loss-making steel frame and cross-laminate timber factories
4 days ago

350-homes approved around iconic London Tube station

Housing blocks to be built around Grade II-listed Hounslow West Tube station
4 days ago

Domis set for £195m Boddingtons Brewery scheme

Developer Salboy buys Manchester site to kickstart long-awaited 556 homes project
4 days ago

John Lewis £500m funding deal to build 1,000 rental homes

Deal to advance BTR flats at store sites in Bromley, West Ealing and Reading
4 days ago

Esh launches new housing retrofit division

Esh Retrofit Solutions will target market to improve the energy performance of social rented homes
4 days ago

Contractor services