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Highways Agency in spending cuts warning

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HIGHWAYS AGENCY bosses fear road spending cuts in the government's 2007 Comprehensive Spending Review (CSR) unless they can show ministers that they are holding down costs.

Speaking at a Civils 2005 breakfast briefing last Wednesday, Agency procurement director Steve Rowsell and major projects director Keith Miller urged the construction industry to demonstrate that it will increase value for money between 2007 and 2010 so that it can secure the future of the 10 year plan.

'We look forward with less confi dence to the CSR 2007, ' said Miller. 'So we need to get all the effi ciencies in place to support our cause.' Miller said that with construction infl tion running twice as high as assumed when the plan was fi rst published in 2000, savings were needed to 'bridge the gap'.

'The 10 year plan assumed construction industry inflation to be 2.5% to 2.7%. It is now at 5% to 6%. So we need efficiency savings to bridge that gap and allow us to deliver the programme, ' added Miller.

Rowsell added that it was down to the industry to impress on political decision makers the benefi ts that clarity in work programmes can have on efficiency.

'We do recognise the need for the industry to have clarity in the forward programme. You know the constraints on us. So we look to you to make that point to the political decision makers, ' he said.

Miller said that the Agency believed effi ency can be improved by bringing more of the supply chain into Early Contractor Involvement (ECI) projects and appointing ECI teams much earlier.

'We are looking to bring ECI earlier, when the schemes are still lines on paper, ' said Miller.

Consultants warned that such a move would increase development costs further. These have already doubled on some projects as a result of ECI, they said.

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