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Health and council maintenance work survives spending review

An anonymous survey of 136 public sector construction clients has revealed how the procurement landscape has changed since the Government unveiled its comprehensive spending review last autumn.

Constructionline – the UK’s largest register of pre-qualified contractors and consultants – surveyed registered users of its service including local authorities, health organisations and housing associations from across Great Britain throughout February.

While it is not overly surprising that the majority of respondents (96%) will have less money to spend on construction activities, contractors will be encouraged that opportunities still exist.

The majority (57%) of health authorities have not been forced to shelve construction projects compared to their counterparts in local government or the NHS.

Many bodies across all sectors are changing procurement practices which can open up the process to new suppliers.

Among the 62% of local authorities planning cancellations an overwhelming majority of these (98%) will be new build compared to just 2% maintenance.

This, combined with the authorities’ concern for SMEs, should provide a good underlying level of opportunities for smaller local firms.

Among the minority of NHS organisations postponing projects, just over half (51%) of cancellations will be new build.

With an overwhelming majority of respondents from across all of the sectors facing reduced construction budgets the survey found that current procurement practices are set to change.

In the health sector just 16% of respondents plan to plan to join a framework or a buying consortium to achieve economies of scale compared to a third of local authorities.

Constructionline’s survey revealed that within the health sector a third of respondents planned to leave a framework or buying consortium and decentralise their procurement practices.

Once again this figure stands in stark contrast to local authorities where 53% plan to centralise procurement to a single office or department.

Constructionline said contractors will need to learn how to adapt their approach to tender contests for different areas of the public sector.

For both local authorities and housing associations a supplier’s cost and financial well being ranked as the most important considerations during the selection process.

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