Government to cut construction costs by 20%

The government will cut 20% from the cost of construction projects by standardising buildings, and give the industry greater foresight of public work.

In its ‘Plan for Growth’, released alongside the Budget on Wednesday, it said it would introduce “new models of procurement” and cut out bespoke design in the public sector.

The Coalition has been putting pressure on suppliers to reduce costs since it won power, and chief construction adviser Paul Morrell has told the government the industry can cut prices by up to 30% if it works in a more integrated way.

Yet this is the first time the government has put a figure on how much it wants construction to cut costs by, and explicitly linked savings to standardisation.

Responding to contractors’ demands for greater clarity over capital spending, it also said it would publish the public sector pipeline from autumn 2011.

“[We will] enable building contractors to respond more effectively to emerging market opportunities by publishing quarterly from autumn 2011, a rolling two year forward programme of infrastructure and construction projects where public funding has been agreed,” the plan said.

Stephen Ratcliffe, director of the UK contractors’ group, said that the pipeline announcement would give the industry more certainty and stability.

“We’re quite pleased with that, it’s good news. It was our number one priority,” he said.