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Forget inflation, Hodge demands

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CONSTRUCTION MINISTER Margaret Hodge this week told contractors to stop carping about the cost of ination. She urged them to take control of spiralling costs by rethinking the way they work.

The Civil Engineering Contractors Association (CECA) has accused the government of 'peaheadedly' denying the extent of in ation - meaning estimated construction costs consistently fall short of real costs.

But in her first meeting with the press since being made construction minister in June, Hodge said that costs should be controlled by more effective deployment of staff.

'Inflation costs come from people, ' she said. 'Contractors should look for different ways of handling construction. There are different ways of doing work, for example by using modularisation and standardisation.' CECA estimates that inflation in the construction sector is running at between 6% and 7%. But 'the government is peaheadedly sticking to its official gure of 2%', said a CECA spokesman.

Estimates of construction costs are therefore 'unrealistic' he said. 'Contractors are having to pay prices that aren't reflected in cost estimates.

'We'd like to see some recognition from the government as to the true figure of inflation. They need to get real, ' he added.

The Treasury bases its figure for in ation on the economy as a whole. CECA estimates it on what its members are paying for commodities.

Hodge said that government construction clients, and clients generally, would not allow contractors to force up prices.

'We'll always try to eke best value out of our projects, ' she said.

Hodge was talking during a tour of Heathrow Terminal 5, her st visit to a construction project in the three months since she started as construction minister.

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