State construction projects blasted

29 Oct 98
Two-thirds of a sample of government construction projects worth £500m in total were completed over budget and three-quarters went beyond deadline, according to an analysis carried out for the Treasury.

30 October 1998

The analysis, compiled by academics from Bath University, also shows that the running of government construction projects compares poorly with that of private sector projects and state projects in the US and Japan. Published yesterday in two sections, the report examines the relationship between clients (government departments) and the supply side (construction companies) in the building of projects, including roads, hospitals and bridges.

Mike Burt, head of Treasury procurement practice and development, said that UK government performance on construction was patchy. 'The two reports are saying there is a lot of room for improvement,' he said.

The public sector accounts for 40% of UK construction industry contracts and so the poor performance of government departments can have a strong impact on the industry as a whole, he suggested.

One report identifies how the government can improve its performance in project management, measurement, standardisation and integration. The other analyses the results of a benchmarking exercise involving 13 government departments and 60 projects.

The projects were all completed between 1992 and 1994, enabling a full analysis to be made. But Mr Burt emphasised that much had changed in subsequent years.

'This is very much a snapshot of what happened five years ago. It isn't a snapshot of what is happening now – we are seeing examples of where things are improving quite significantly,' added Mr Burt, who is also chairman of the Government Construction Client Panel.

He highlighted the performance of the Ministry of Defence which has set up project management partnering experiments and has been working with construction companies on a project called 'Building down barriers'.

At a press conference yesterday, Paymaster General Geoffrey Robinson announced a three-year action plan to improve government performance in construction procurement. 'The [construction] industry tells us regularly that change will only occur when government is seen to be improving itself. We are committed to doing exactly that,' he said.

One of the main problems identified was the role of the project sponsor, who will now benefit from a training programme to encourage empowerment. Government departments and the National Audit Office will also be working together to monitor improvements.

The majority of the 60 projects did not involve the Private Finance Initiative and those that did showed no marked improvement in performance. Mr Burt admitted that this had surprised the Treasury. 'The nature of PFI and the nature of the early involvement and discussions with the supply side and the allocation of risk are much more focused than they tend to be in the traditional procurement route.'


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