Government cuts construction costs by 7%

Aaron Morby 11 years ago
Share

The Government expects savings in its health and school building programmes of up to 7% in the first year of its war on inefficiency.

The Cabinet Office today reveals it is committed to delivering trumpeted savings of 15-20% by 2014/15 from central construction projects.

Latest cost figures show that Partnership for Schools and the Ministry of Justice have led the way in extracting cost savings of up to 7%, against benchmarked data from 2009/10.

The Department of Heath using Procure 21+ is hard on their heels with an expected 6% saving by the end of the financial year in its building programme.

The Environment Agency will also trim 3.8% from programme budgets, with the Highways Agency achieving a smaller 1% saving.

The data published by the Cabinet Office equates to around £180m being saved from all centrally procured projects this year.

Details were also released of seven construction projects to be used as test beds for new cost saving ideas.

The Ministry of Defence will trial integrated project insurance on a £7.6m contract for training facilities at Lympstone Royal marine base.

The MoD will also set savings targets for its framework contractors with the threat that if they are not met work will be tendered outside the framework.

This cost led procurement approach will also be trialed on a new hangar project at RAF Waddingdon and the Environment Agency’s £2.4m Upper Mole flood alleviation scheme and £5m Rye harbour sea wall defence project secured by Jackson.

Two-stage open book procurement will also be rolled out through two Housing and Communities Agency procurement programmes.

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 new figures come as the Highways Agency also reveals plans to roll out project bank accounts to over 20 building and maintenance projects in the next three years.

The supply chain on the M4/M5 managed motorways scheme (Bristol) and the M62 J25 to J28 managed motorway scheme (North Yorkshire) are already benefiting from the huge change in the way they are paid.

The Cabinet Office is working with public sector construction procurers to extend the use of these accounts.

This year alone, over £500m worth of projects have already been signed up to use project bank accounts and this will rise to £4bn by 2014.

This rapid roll out will see the cash flow easing initiative used for almost 20% of the spend in government construction projects in three years’ time.

Latest news

Enabling works start on £200m Cambridge station

Murphy starts site preparation ahead of main contractor award next month
19 hours ago

Industry aims to be almost diesel-free by 2035

Big players agree first steps to eliminate diesel from most sites
2 hours ago

Weston Homes plans £50m East London scheme

Land deal for 147 homes at Town Quay Wharf in Barking
2 hours ago

Lee Marley Brickwork hires Countryside regional FD

Matt Sheehan joins from house builder's partnerships arm
2 hours ago

Demolition deal awarded on Chancery Lane refurb

General Demolition Ltd lands demolition and enabling works package
2 hours ago

Contractors no longer lagging on digital transformation

Construction shrugs-off image as late adopter of technology
2 hours ago

Work stops on MAC education job

MAC-Interiors seeks protection from creditors as subbies walk away from Birmingham site
1 day ago

HS2 labour supply firm posts loss despite revenue jump

Hercules Site Services confident about future prospects despite HS2 slow down
1 day ago

Graham to lead UPP push for next generation green campuses

Student campus developer strikes deal with Architype to design and retrofit next generation net zero student halls
1 day ago

NG Bailey appoints Sellafield chief as NED

Martin Chown joins M&E contractor main board
1 day ago

EN:Procure wants firms for £700m new-build homes deal

Regional social housing consortium Efficiency North to renew house building partners
1 day ago

£470m tunnel plan for Scotland’s landslip-prone A83

Scottish Government plans 1-mile long debris flow shelter to protect vehicles from falling rocks
1 day ago

Developer dumps Henry Construction from London tower job

Growing list of subcontractors and suppliers complain they have not been paid
4 days ago

HS2 construction shake-up sees main contractor changes

Align to take over responsibility for parts of the route previously under the control of EKFB
4 days ago

Claritas Group heading for liquidation

CEO of £50m turnover contractor confirms news and thanks staff and suppliers
4 days ago

Go-ahead for clutch of major jobs to reboot Manchester

Two biggest high rise projects at Bridge Street and Medlock Street to cost £575m to build
4 days ago

Plan for major NHS estate green upgrade framework

NHS Shared Business Services starts early consultation with firms on decarbonisation retrofit plan
4 days ago

Willmott Dixon signs £34m revamp of DfE headquarters

Grade II Sanctuary Buildings in Victoria will be modernised and made energy efficient
4 days ago

£500m southern highways framework up for renewal

Ten firms face fight to retain places on major councils roads framework
5 days ago

Engineering losses halve Briggs & Forrester profit

Main engineering services arm suffers £1.6m loss
5 days ago

Plans in for University of East London campus expansion

Work to start in early 2024 on 280,000 sq ft Stratford teaching and student rooms scheme
5 days ago

CITB told to improve by Ofsted inspectors

Number of in-house apprentices drops as training body changes business model
5 days ago

IHP wins £100m Derbyshire mental health projects

Vinci/McAlpine JV will build two 54-bed Adult Acute Care units
5 days ago

Align hits key milestone on HS2 Colne Valley viaduct

Engineers rise to the challenge to complete first V-piers in lakes
5 days ago

£9.3bn race starts for National Grid construction partners

Plan for Great Grid Upgrade Partnership to be set out at bidders day in early June
6 days ago

Plan approved to redevelop major Glasgow shopping mall

Outline plan backed for demolition of St Enoch centre for over 900 homes, shops and leisure space
6 days ago

Banned demolition boss wins appeal to remain a director

Paul Cluskey wins Court appeal to remain director of Cantillon but steps down as MD
7 days ago

B&K confirms £140m Leeds build to rent project

Work to start on Whitehall Riverside twin blocks for client Glenbrook
7 days ago

McLaren Property to revamp Liverpool roller skating site

242-bed student scheme unveiled for sensitive site
6 days ago

Wates names Midlands construction chief

Matt Johnson promoted after just 10 months at family-owned builder
7 days ago

Contractor services