THE commitment to reduce the cost of construction by 20% is no small thing, but it will help the Government and the construction industry. This strategy will stimulate growth by enabling more to be constructed within the funds available.”
These comments from cabinet office minister Francis Maude outlined a key element of the Government Construction Strategy, and one which has left many scratching their heads.
Less than a week after the launch of this strategy, the Office of National Statistics (ONS) released figures for the first quarter of 2011, showing a 23% drop in construction orders from the fourth quarter of 2010.
The suggestion that some industry organisations will question these figures, because they believe there to be a recovery under way, certainly does not reflect the reality of the situation in the North East.
There is no recovery in the North East construction sector, no “green shoots”. The Government must realise this and act now, before the problems get worse.
When the ONS figures stated earlier this year that the economy had grown 0.5% in the first quarter, the sector breakdown highlighted construction as having suffered a dramatic 4.7% fall in output. This is a sector which accounts for circa 7% of GDP.
Yet the Government wants to cut the cost of construction by 20% and Mr Maude says it will help the industry.
While it is good that there is a realisation that dialogue between the Government and the industry is needed, this cost reduction is the major concern, particularly the openness of the statement and the need for industry to know to what and when it refers before agreeing with Mr Maude’s suggestion that it is a good thing.
I know that John Nielsen, partner at CK21 and the North East chair of CIC, is among those working on a regional response to ensure our voices are heard.
The strategy will help in providing a rolling programme of two years of Government contracts.
It also highlights the advantages of standardisation and building information modelling, along with a review of procurement procedures.
As I said above, it is a real positive that Government is taking notice of an industry which plays such a vital part in the economy. However, it must be acknowledged that one size does not always fit all when it comes to the regions of the UK, particularly the North East.
Anybody who has any thoughts – good, bad or indifferent – should contact myself or John, so that as many industry opinions as possible can be fed into the regional response.
For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191-3740233 or catriona@cene.org.uk.
Catriona Lingwood, chief executive, Constructing Excellence in the North East.