Last edited 26 Mar 2016

Government Construction Strategy 2011 2015

Note: In March 2016, this strategy was superceded by the Government Construction Strategy 2016 2020.


[edit] Introduction

The Government Construction Strategy (available from the website) was published in May 2011. It was prepared by the Efficiency and Reform Group, working with the Construction Sector Unit of the Department for Business Innovation and Skills (BIS), and Infrastructure UK (IUK). The strategy was overseen by the Government Construction Board, originally chaired by the Chief Construction Adviser. However, when that role was abolished in November 2015, Cabinet Office minister Nick Hancock took over responsibility.

Government construction strategy front cover.jpg

The intention of the strategy was to reduce the cost of public sector construction by up to 20% by the end of this parliament, and to stimulate growth in construction.

The strategy acknowledged that whilst public sector construction projects account for 40% of the £110bn per annum expenditure on construction in the UK, the government had not been very effective at exploiting this enormous purchase power. It set out measures by which the government could make better use of its power and at the same time, lead what it saw as much needed changes in the industry.

The strategy followed on from the Latham Report (Constructing the Team, 1994) and the Egan Report (Rethinking Construction, 1998), and made a similar, somewhat damning assessment of the industry, suggesting amongst many criticisms that:

  • The UK does not get full value from public sector construction.
  • There is broad consensus that construction under-performs.
  • There are poor and inconsistent procurement practices leading to waste and inefficiency
  • There are low levels of standardisation, and fragmentation of the public sector client base.

[edit] Proposals

The strategy called for '…a profound change in the relationship between public authorities and the construction industry to ensure the Government consistently gets a good deal and the country gets the social and economic infrastructure it needs for the long-term…'

The detailed proposals set out in the strategy included:

Six Task Groups were established for different areas of the strategy:

[edit] Progress

In July 2012, the government published Government Construction Strategy: One Year On Report and Action Plan Update:

  • The report stated an intention to achieve savings of '15 to 20%' by the end of the parliament (rather than 'up to 20%' as stated in the original strategy).
  • It found that £72 million of actual savings had been made in the first year, and projected savings of £279m (including the £72m achieved savings) in whole-life costs on a spend of £2.6bn in the main procuring departments. This was described as representing 10% projected savings, although clearly projected savings are not actual savings, and there could be disagreement about how such savings are calculated. It was also be argued that the savings that had been achieved were in part the result of the economic downturn rather than government policy.
  • In addition, benchmarking and cost reduction trajectories were published for the seven main procuring departments.
  • Alongside the main report, the final reports of the Procurement / Lean Client Task Group and the Standards / Lean Supply Task Group were published and the two groups were disbanded.
  • It was also announced that the Achieving Excellence in Construction guidance previously referred to in the Government Construction Standards had been archived, although no alternative guidance was published.
  • Government Soft Landings (GSL) was moved to the BIM Task Group. It was thought that in parallel to the roll out of BIM, the government may mandate a GSL handover protocol for central government projects by 2016.

In June 2013, a survey of construction clients by Building magazine found that 47.1% of public sector clients had made no changes in response to the Government Construction Strategy, and only 5% said they had changed their practices significantly. Some proposed reforms, such as the adoption of project bank accounts were actually being led by private rather than public sector clients. However, there was found to be significant adoption of BIM among public sector clients, with 38% saying they had used BIM on at least one project.

In July 2013, the Government published: Construction 2025, Industrial Strategy: government and industry in partnership, setting out its long-term vision for ‘…how industry and Government will work together to put Britain at the forefront of global construction…’

Rather ambitiously, the report proposed:

  • 33% reduction in the initial cost of construction and the whole life costs of built assets.
  • 50% reduction in the overall time, from inception to completion, for newbuild and refurbished assets.
  • 50% reduction in greenhouse gas emissions in the built environment.
  • 50% reduction in the trade gap between total exports and total imports for construction products and materials.

It was not entirely clear what the relationship was between the Government Construction Strategy and Construction 2025, or between the Government Construction Board and the Construction Leadership Council (a joint industry / government body established to oversee Construction 2025). Construction 2025 simply stated that one of its objectives was to “Drive procurement efficiency and explore options for further efficiency gains in the procurement process, led by the Government Construction Board and the IUK Client Group.”

On 2 July 2014, the Cabinet Office published 'Government Construction, Construction Cost Reductions, Cost Benchmarks, & Cost Reduction Trajectories to March 2014' in which it claimed that there was '... evidence that the Government Construction Strategy’s overarching target - to achieve a sustainable reduction in the cost of construction by 15-20% by the end of this parliament - is being achieved more widely across government.'

In March 2016, however, the strategy was superceded by the Government Construction Strategy 2016 2020. This revealed that only £3.3 billion had been saved over the entire period of the first government construction strategy compared to the £8.8 billion a year that had been targeted. The Government Construction Strategy 2016 2020 set a much less ambitious target of £1.7 billion over the whole period 2016-2020.

[edit] Criticism

The strategy was broadly welcomed, but there was some scepticism about whether the government would follow it through, and how the roll out of BIM would be implemented, along with some criticism that the increasing use of large, long-term contracts and framework agreements might act as a barrier to entry to new suppliers and so a barrier to innovation.

The size of the savings projected was also questioned given that the recession meant the industry was already at its least profitable and most productive since records began (ref Constructing Excellence and Glenigan: Industry performance report).

Despite a great number of reports about the construction industry, and numerous attempts to improve efficiency, the perception persists that the industry is wasteful and adversarial, it might be inferred therefore either that; under the circumstances the industry operates more effectively than it appears from the outside; expectations are unrealistic; or recommendations have been consistently poorly implemented.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki

[edit] External references