UK construction targets under threat if public procurement fails to improve, ACE warns

11 August 2015

UK government targets to cut construction costs will not be achieved without significant improvement in procurement, according to research.

A report by the Association for Consultancy and Engineering (ACE), examined the investment process and public sector procurement landscape and said there were more than 40,000 procuring bodies across the public sector.

The study, Procurement landscape - wider, challenging, and in need of reform, cited figures estimating the UK Government procures £230 billion of products and services a year.

“This, therefore, provides a significant challenge in ensuring that public sector investment achieves the best social and economic outcomes,” the report said, concluding a more strategic approach was needed in public sector procurement.

ACE said: “This research finds that too often parties involved in procurement are trying to enact change as part of the transactional process of buying and not as part of the strategic investment decision-making process which sets many of the high level demands and complex conditions for how projects will be procured.”

The report also outlined the importance of filling a skills gap to improve public procurement.

“Just having improved skills at the project level will not solve a skills mismatch, if an investment strategy is flawed from the start, an efficient outcome is not possible.”

It added: “In addition, there is generally a lack of appreciation at the relevance of skills to ensure the public gets the most out of its investments.”

The report concluded that while “the ability to deliver a project can be constrained by industry, the default ability to deliver a project is dependent on the client’s skills or lack thereof.”

ACE said targets to cut the cost of construction by a third, reduce the completion time of new builds, slash greenhouse gas emissions and reduce the trade gap between construction product imports and exports, were in danger.

“The targets above are very ambitious, and will not be achieved unless the process of commissioning and procurement is significantly and consistently improved and harmonised across a wide range of clients,” the report said. “Only this will deliver an efficient investment process going forward.”

The report is the first in a series of studies on procurement by ACE. The organisation said future studies would examine issues including the potential impact of devolution on procurement, the effect of collaboration between client organisations and industry on pricing, as well as a wider report on the education and skills.

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