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CLC sets out vision for post-Carillion sustainable business model

11 July 2018 | By Neil Gerrard

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The Construction Leadership Council (CLC) has set out its vision for a sustainable business model for the whole of the construction supply chain in the wake of the Carillion collapse.

The CLC issued a rallying call for an “outcome-based, transparent and efficient industry” as part of a new industry report Procuring for Value, authored by CLC member and global board director of Rider Levett Bucknall (RLB) Ann Bentley.

Following on from the launch of the government’s Construction Sector Deal last week as well as the Public Administration & Constitutional Affairs Committee’s conclusion that government procurement policies contributed to the collapse of Carillion, Bentley set out a three-pronged approach to creating a sustainable business model for construction.

That includes: procuring on the basis of whole-life value and performance; measuring and rewarding good performance and; “getting the basics right”, including fairness of cash-flow and reforms to the practice of retentions.

Highlighting how the industry equates for over 10% of the UK workforce, or the equivalent of £600bn contribution to the economy per annum, Procuring for Value outlines how the industry needs to change to improve productivity, end user satisfaction and safeguard those in the sector. It also estimates that a more “joined up” approach to procurement could result in a saving of over £15bn per annum.

The report, produced by the Construction Leadership Council (CLC)’s Supply Chain and Business Models work stream, builds on the sector deal’s strategic principles of Digital, Manufacturing and Whole-life Performance and claims to make practical, long-term recommendations for both government and industry to facilitate change.

Bentley said: “The Procuring for Value report is a fundamental strand of our policy, outlining the best practice for the industry delivered through standardisation and digital technologies. Construction needs to change.  Every rung of the supply chain needs to take responsibility and understand their impact on the industry and the larger financial picture that is at play. The report highlights as an industry how we can do just this.”

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