CIOB threatens to expel cover-pricing firms

The Chartered Institute of Building is threatening to expel firms found guilty of cover pricing by the Office of Fair Trading.

The body said it would conduct its own investigation into members named in the inquiry. Of the 103 firms fined a total of £129.2m, 10 were CIOB members, including Kier, Willmott Dixon and Mansell. The CIOB comprises 350 firms and 45,000 individual members.

Separately, the body is facing a backlash from members who are angry that the CIOB did not support them during the inquiry.

The chief executive of one contractor said it was leaving the organisation. He said: “This is the time when the industry should be working together, not making short-term points and coming up with soundbites.”

News of the row came as the OFT published the full findings of its investigation. The 1,945-page document sets out the evidence for each infringement and response by the firms during the investigation. Eighty-six had their penalties reduced for co-operating with the inquiry.

So far Galliford Try, Renew Holdings, Kier, Ballast Nedam, Apollo Group and Qarmby Construction have said they will appeal against their fines.

The CIOB said it would wait for the result of the appeals before starting its investigation. It will then examine each firm with a view to taking disciplinary action.

Jess Deacon, manager of the Chartered Building Companies (CBC) – the 350 contracting firms that belong to the CIOB – said: “The CBC board will normally institute disciplinary proceedings against any member firm when there is prima facie evidence that it has failed to follow the code of professional conduct, and/or is in breach of these rules.”

The CIC wouldn’t recognise any firm that wasn’t a member of
the CIOB

Graham Watts, CIC

Responding to the claims that it had failed its members, the CIOB said it was set up for the benefit of the public and it was not its role to stand up for its members.

Graham Watts, chief executive of the Construction Industry Council (CIC), said: “ This sends out a big message to the industry. At the CIC we wouldn’t recognise any firm that wasn’t a member of the CIOB.”

The National Federation of Builders and Federation of Master Builders said they would not take disciplinary action against their members.

Chris Blythe, chief executive of the CIOB, said:

"The quoted contractor seems to consider that the CBC scheme is a trade association in the mode of the NFB. The CBC scheme when formed made it explicitly clear that it was a professional association and not a trade association.

"This is probably why the main trade bodies have now had to incorporate such requirements as 'obeying competition law' into their own code of conduct.

"Finally, the disciplinary processes should provide an opportunity for the Institute to learn first hand about the OFT issues; the remedies now in place and in turn invest that into the future development of training and the education curriculum for the future benefit of all in the industry.

"We are there for the industry and our members. After 175 years of service to the industry there can be no doubt that the Institute is about the long term and not the short term."