IUK publishes implementation plan for £3bn savings

The Treasury has published its implementation aimed at delivering savings of up to £3bn per year from infrastructure construction costs.

The Infrastructure Cost Review Implementation Plan outlines a programme of activity to secure savings first identified in the Infrastructure Cost Report from December.

The key elements of the plan include:

• A charter between the construction industry and government which sets out “behaviours expected in future relationships”.
• Establishing a data group between the public sector and industry practitioners to extend the use of cost benchmarking in infrastructure delivery.
• Encourage greater innovation by introducing new models of competition and procurement.
• Create a Joint Programme Management Board to be chaired by Paul Morrell, the government’s chief construction adviser, which will ensure the plan is implemented consistently across the wider public sector.

IUK is currently working with the Highways Agency, High Speed 2 and the Environment Agency to implement their measures in future programmes.

According to the plan, if implemented correctly, an integrated “horizontal” model of procurement will replace the traditional vertical scale of designers, contractors and specialists.

More detail on the measures relating to public sector construction and procurement will be published before the end of May.

The plan has also established three steering groups to maintain ongoing collaboration between the industry and government:

• Simon Kirby, director of investment projects with Network Rail, will head up an infrastructure client and procurement group which will encourage more effective application of competition to find cost savings and growth through the supply chain.
• Stephen Fox, chief executive with BAM Nuttall, will lead an infrastructure industry group to examine how supply chain integration, procurement approaches and contracting models can increase productivity and growth.
• Brian Collins, chief scientific adviser to the departments for transport and business, will lead the infrastructure data group who will develop a means to capture post project cost information and improve access to international data.

ICE president Peter Hansford, charged with overseeing the three groups, said: “Reducing infrastructure costs could save government and private investors billions of pounds, or more can be built with the same level of funding, benefitting society as a whole.

“This would be a worthy objective at any time, but during a time of austerity delivering “value for money” has never been more important.”

Paul Skinner, chairman of the Infrastructure UK Advisory Council, said: “Reducing the costs of infrastructure is a core activity for IUK and a key element in the National Infrastructure Plan.

“There is a lot of hard work still to do across government but a real opportunity to make a step change in the way in which infrastructure is delivered.”