Government looks to better procurement to cut construction costs

29 Mar 2011

Source: Supply Management

The UK government has announced an ambitious plan in a bid to reduce public sector infrastructure and construction costs by up to 20 per cent through better procurement processes.

 UK Chancellor George Osborne announced the government’s Plan for growth in his budget statement this week, which revealed new procurement models were being created to achieve the savings. 

The growth plan said the UK government would reform the way the public sector purchases construction and infrastructure, which includes measures to encourage standardisation rather than bespoke designs. 

 “We are in the process of finalising the new models of procurement and other measures for public sector construction and infrastructure to reduce costs by up to 20 per cent. Further information will be published in May 2011,” a spokeswoman for the Cabinet Office told SM.

At the end of last year, the Treasury said it could save around AUD$4.7 billion-a-year on infrastructure investment partly by improving procurement processes.

 A report by Infrastructure UK (IUK) set out a blueprint to save money on the National Infrastructure Plan 2010 - a AUD$312 billion, five-year investment programme.

The report by IUK, a separate unit within the Treasury, outlined how costs of building and maintaining energy, transport, waste and flood defence infrastructure projects can be reduced.

 It was based on a survey of those in the infrastructure construction industry and showed they welcomed client-side improvements in planning, commissioning and procurement of projects.

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