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Government moves to manage construction capacity

GOVERNMENT STAFF are to be trained to use a new computer modelling tool that should allow better management of the demand for public sector construction projects.

The Experian-developed Design Capacity Model, which was produced in response to Sir Christoper Kelly's report on government procurement, will be rolled out from next week to central government teams.

Kelly called for a public sector demand database that would allow the sector to more effectively programme spending to avoid bunching of major projects. If this was not possible, he wanted a tool to predict the impact of doing similar work at the same time on construction ination.

The model is the result of work carried by Deloitte and Experian for the Of e of Government Commerce (OGC) to examine the construction industry's capacity to deliver the Olympics on time and on budget. It looks at the likely effect on other capital programmes throughout the country as published in May (see box).

Government departments and local authorities will input their project plans to the new database.

Other departments and local authorities will be able to view the data and so gain a picture regionally and nationally of what is proposed, and then plan around it.

The private sector will also be able to view the information so it can use it in its business plans.

The model also includes information on private sector demand.

'It is not a predictive tool, however, it can be used to indicate the impact of, say, oil price rises on construction prices, ' said assistant director of the OGC's Smarter Construction Unit John Ioannou.

'We expect the model to be live by April, ' Ioannou added.

'For phase two of its development we are planning to add in performance data so that departments and supplier can see how well the government is delivering projects in relation to time and budget.'

The Construction Demand Capacity 2005-2015 study concluded l The UK construction industry is not expected to face signicant general labour capacity constraints to 2015.

Signicant skills shortages are identied in project management, design disciplines such as mechanical and electrical and civil engineering, bidding capacity and client-side leadership.

Industry-wide new work ination for 2005-15 is expected to be about one percentage point above underlying ination (3% a year, compared with 2% a year for economy-wide ination).

l Olympics' construction expenditure will add, on average, 0.12% a year to output price ination and 0.2% a year to tender price ination in London between 2006 and 2010. This premium will peak at 0.6% during 2006/2007.

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