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Budget 2011: public projects to slash costs by 20%

25 March 2011

The government aims to cut the cost of public procurement by 20 % by using the the standardisation of building design to drive down costs, Building reported.

In its ‘Plan for Growth’ released alongside the Budget, the Treasury pledged to introduce “new models of procurement” and cut out bespoke design in the public sector.

The coalition government has been putting pressure on construction suppliers to reduce costs  - a policy reflected in statements from chief construction adviser Paul Morrell - but this is the first time the government has put a figure on how much it wants to cut costs by, and explicitly linked those cuts to design standardisation.

Meanwhile, responding to contractors’ demands for greater clarity over capital spending, the government also said that from autumn 2011 it would publish a quarterly guide to the public sector's “pipeline” of projects to be tendered.

“[We will] enable building contractors to respond more effectively to emerging market opportunities by publishing quarterly from autumn 2011, a rolling two year forward programme of infrastructure and construction projects where public funding has been agreed,” the plan said.

The CBI welcomed the Budget and highlighted the importance of the two-year public sector pipeline, which will give firms a clearer picture of future work.

Dr Neil Bentley, CBI deputy director-general, said: “The CBI welcomes the government’s two-year programme for infrastructure and construction. A longer-term pipeline will also boost confidence over future revenues, allow greater innovation and enable the industry to reduce cost.”

“This is a Budget that will help businesses grow and create jobs, and the Chancellor announced a number of measures to help boost the UK’s construction pipeline and speed up the planning process,” he said.

Stephen Ratcliffe, director of the UK Contractors’ Group, also said that the pipeline announcement would give the industry more certainty and stability. “We’re quite pleased with that, it’s good news. It was our number one priority,” he said.

Construction News saw the move as the latest attempt to make public procurement less painful for contractors, following plans trailed by cabinet minister Francis Maude to increase the proportion of contracts awarded to small and medium sized businesses. 

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