Scape Group, the public sector-owned built environment specialist, has carried out the most comprehensive survey of the UK’s construction supply chain.
The Sustainability in the Supply Chain report, which surveyed more than 150 contractors, subcontractors and senior managers at public sector organisations, also examined supply chain stability, the tendering process and reliance on the public sector.
Here’s five things it says about public procurement:
1. Skills shortage hitting quality
The report highlights the stark realities of the skills shortage, with 58% of contractors and suppliers citing the shortage as negatively impacting the quality of their workmanship.
This sentiment was amplified in the 85% of public sector managers who see the quality of their built environment projects negatively affected by the skills shortage.
More than a third (35%) of public sector managers felt that the skills shortage was “bad” or “severe” in their area but it was SMEs who were noticing the problem most acutely with 85% seeing a shortage in their area.
In addition, 80% of public sector respondents and just under 40% of contractors and consultants see the skills shortage as negatively impacting their ability to keep to budget.
2. Public sector is still a very big client
The public sector funds more than a quarter of the business for 64% of contractors and suppliers interviewed. When broken down further, it is clear that SMEs rely more heavily on the public sector, with over a quarter (26%) of companies stating it funded more than 50% of their work.
3. Thinking local counts
Effective management of the supply chain is seen as a route for the public sector to deliver local economic benefits and social value. 50% of public sector respondents said that they would typically like to see 50% or more local spend within 20 miles of each project.
However, 80% of public sector respondents believe that the public sector “needs to do more” to engage with its supply chain.
4. Frameworks are big
The survey reveals that frameworks, already an important way of procuring work for the public sector, are increasingly popular with contractors and suppliers.
45% of the businesses surveyed use frameworks for public sector projects and contracts, demonstrating that the industry is responding to the growing public sector demand for frameworks. Only 20% felt poorly informed about future work.
5. Public sector projects provide bread and butter for SMEs
There are clear ongoing risks that face a small firm that is dependent on public sector projects – particularly during a period of economic uncertainty and austerity.
More than a quarter (26%) of the small and medium sized businesses surveyed said that more than 50% of their work comes from the public sector. This is reflective of the industry as a whole. A total of 42% of the SMEs surveyed said they received work through public sector frameworks.
