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Government savings on construction costs climb to £840M a year

The government increased the amount of money it saved on construction projects to £840M last year.

The savings, achieved through the cost-efficiency drive launched in 2011, represent 19.6% of total recorded construction spend for 2013/14, which totalled £3.5bn.

In 2012/13, the Government reduced spending by £447M, which was 15.6% of the £2.4bn spent on construction.

The Education Funding Agency and Highways Agency delivered the majority of the cost savings.

The government said open-book two-stage tendering will be scrutinised for its cost reduction potential.

It will subject selected projects to in-depth studies: the Wrexham prison scheme won by Lend Lease; and a 22-schools project contract won by Osborne, Miller and Balfour Beatty under the IESE Framework.

These schemes are already achieving significant savings and may lead to a further shift in government procurement practice.

The cost efficiency drive was introduced in 2011/12, saving £72M in its first year.

The government has targeted savings of 15%-20% by the end of this Parliament

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