Government 'must scrap' framework strategy

19 September 2011

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19 September 2011 | Adam Leach

Plans to award national frameworks for construction contracts will stunt growth in regional construction sectors, according to the North East Chamber of Commerce (NECC).

In a letter to the All Party Group for Excellence in the Built Environment, which is currently evaluating the government’s construction strategy, the NECC has called for any move to increase the number of national frameworks to be scrapped. The group, which represents businesses in the north east, believes that while they may benefit the public purse in the short term, the framework strategy will damage the prospects of regional business.

Ross Smith, head of policy, NECC, said: “While the government is right to look at the best ways to get maximum value out of construction procurement, it is going about this in totally the wrong way. By creating national frameworks, it is squeezing medium-sized companies from both ends – and yet these are the very companies that the government needs to grow if we are to rebalance the economy and kick-start north east growth.”

Instead, Smith believes the government should allow regional bodies, such as the North East Procurement Organisation, to continue to manage procurement in the areas they serve. “Having a strong understanding of the regional supply market and recognising the wider impact of awarding work at a regional level will have a far greater positive impact in the short, medium and long term,” added Smith.

Under the national frameworks strategy, large-scale national contracts are awarded to provide services and supplies to the government, enabling it to make significant savings through economies of scale. However, the NECC believes this strategy will favour bigger companies, because SMEs don’t have the resources to bid for such large contracts.

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