THE chief executive of a Teesside building group says the small firms are getting a bad deal as the Government tries to cut £3bn a year.

John Dickson, executive chairman of Owen Pugh group which operates from Teesside, Tyneside and Sunderland, claims small and medium size firms in building and civil engineering are being disadvantaged after Infrastructure UK (IUK) got the job of advising Chancellor George Osborne on how procurement costs in the public sector could be cut by 20% to give better value for £200bn of investment the Government is promising over five years.

As a division of the Treasury, IUK has also to investigate why, according to an earlier report, building of infrastructure in the UK costs more than elsewhere in Europe.

Dickson says: “Civil engineering is more expensive in the UK because the public sector and others have gold-plated the specifications. This isn’t acknowledged or understood enough so far.”

Dickson knows he is entering dangerous territory and that what he suggests could be seen as a call to cut corners to get the job done. But the argument has to be held out in the open - and he is certainly doing that.

He believes smaller firms forming a large segment of the industry lack adequate “voice in court” to speak up within IUK’s advisory council and senior management.

He says: “While there’s lots of good stuff in the plan significant points seem missed.

“In health and safety and public safety, in environment - and in the stringent specifications for materials, design and quality - standards we work to in Britain exceed significantly what firms work to in other countries.

“Accident rates in German civil engineering are five times higher than in the UK. That UK performance doesn’t happen without significantly greater cost.”

Dickson, whose £25m turnover business - founded in 1946 - employs 300, says: “We have worked directly with German companies in the UK through a German supermarket group bringing German teams across to do German construction here.