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Civils cost cutting drive needs leader

Lack of political leadership is hampering efforts to cut the cost of civil engineering projects in the UK, construction industry leaders said this week.

Treasury body Infrastructure UK (IUK) is currently working up a detailed action plan for industry and government that it believes could cut 15% from project costs.

It will publish the plan with March’s Budget.

But industry leaders said that IUK’s efforts were being undermined by the lack of a high profile political champion.

The body’s chief executive James Stewart resigned shortly after publication of last December’s Infrastructure Cost Review which identified the broad areas requiring action (NCE 13 January).

These included government providing more workload certainty while improving procurement.

“There is some really good stuff there, but does it have high level support? There is no demonstration of that at the moment and without that it is a load of waffle,” said a senior industry source.

Nichols Group chief executive Mike Nichols agreed. “For this valuable reform to succeed unlike its predecessors it needs a clear champion,” he said.

“Without that champion I am not optimistic about seeing any significant improvement”

Mike Nichols

“Without that champion I am not optimistic about seeing any significant improvement.”

Industry leaders told NCE that a Treasury minister should take ownership of the process. They ruled out construction minister Mark Prisk and chief construction adviser Paul Morell as too junior. Prisk is attached to the Department for Business Innovation and Skills.

“This really needs [chancellor] George Osborne to get behind it and I’m not convinced that he will,” said a source.

IUK admitted that reform was not going to happen quickly.

“We intend to make sure these savings are realised. But this a programme that might stretch over the duration of this spending review period, and may take even longer,” head of public sector markets Stephen Dance.

Dance stressed that it was in the industry’s interest to act on board IUK’s recommendations.

“There is nothing really new and earth shattering in what we have said. But things really are different now. There is less money, there are fiscal constraints and there will be for some time.”

Dance said it was essential that clients and main contractors bring in more innovation from the supply chain.

“These £2bn to £3bn a year of savings won’t be achieved without a shift in behaviour in the industry,” he said.

Investigation steering group member and ICE president Peter Hansford added that cost reduction needed to be treated as a “radical business change programme in its own right”.

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