Oi, big spender

This was the declaration by CBI director general Sir Digby Jones this week, as he launched the Construction Products Association’s annual appraisal of the government’s spending performance from the Labour Party Conference in Brighton. “In too many areas, inadequate mechanisms are in place to monitor what progress is being made and whether the investment is value for money.”

In its report Achievable Targets, Jones and the CPA have publicly concluded what many in the construction industry have been privately telling the major spending departments for months – that the government is falling way behind on its pledges in the built environment. Whether the heart of the problem is that Gordon Brown isn’t balancing his books properly or whether the money is choked within the bureaucracy of Whitehall, the facts remain the same. Not one school under the Building Schools for the Future programme has yet to reach financial close, putting the target of delivering 380 schools by April 2008 in considerable doubt. Of the 80 new-build and 90 refurbishment schools projects, eight are in procurement but again none has reached close. There are also serious doubts that public sector clients can cope with the ambitious pledge to double annual social housing output by 2007/08 – for evidence of this, look no further than the problems facing the much-hyped housing growth areas. Furthermore, key transport projects are still in a mess, with little light at the end of tunnel.

Oh, and then there is the small matter of the astronomical bidding costs associated with major hospital PFI schemes – the effect of which could yet distort findings that the equally ambitious health programme is largely on target.

Nevertheless, it is difficult to fault the government’s apparent desire to invest in and embrace public service reform. After all, despite all the aforementioned problems in delivering targets, public service spending does account for about 40% of UK Construction Plc’s turnover – and the industry is not going to argue with that. But what is crucially lacking is any clear idea of when these huge volumes of public work will be coming onto the market, leaving companies struggling to cope with the workload.

With industry capacity becoming a major problem, Whitehall would do well to listen to the CPA’s recommendation that it improves transparency in the procurement process. The private sector needs to know exactly what the government wants to procure and when, so it can prepare for the future. In particular the CPA suggests the government’s chaotic transport programme is in dire need of an injection of clarity. And who would dispute that?

It’s time for the government to be more realistic with its targets and help the industry prepare for the onslaught by simplifying processes and communication channels. Then maybe we’ll start getting somewhere.