Prescott's letter is designed to hammer home the message that public sector practices have to be lifted out of the dark ages of the early 1990s. Whitehall sources said that Prescott and construction minister Nick Raynsford are concerned that too many civil servants still award work purely on the basis of lowest tender price. Prescott believes selection according to value for money is the key.
With the public sector accounting for 40% of total UK construction spending, Whitehall sources see the deputy prime minister's initiative as essential to the health of the industry. It comes against the background of last week's survey by estate agent Drivers Jonas that showed that only 33% of chief executives at Britain's top 200 contractors believe the government can be called a "best-practice client".
The Prescott initiative is also seen as crucial because he is working with the Treasury, which in the past has not backed the DETR's efforts to prove that lowest cost is not best value.
The letter to the Cabinet is the central component of a three-pronged strategy to get the message from the DETR and the Treasury to all levels of government.
A taskforce of senior civil servants, chaired by the Treasury's Finance, Regulation and Industry Directorate chief Steve Robson, is to form the second wave of the assault. DETR deputy secretary Mavis McDonald will be the deputy chair, and senior officials from the Highways Agency, Ministry of Defence and Department of Health will be asked to join.
Whitehall sources said this committee will ram home the Treasury's threat to cut the budgets of departments that cannot prove they are getting good value from construction work.
A letter from the deputy prime minister is stick enough. We want a positive relationship with departments in implementing the initiative
Mike Burt, treasury Head of Procurement practice
Prescott's letter pre-empts the third tier of the effort – a move aimed at junior civil servants. On 4 March, chief secretary to the Treasury Alan Milburn is to endorse an action plan designed to improve procurement practices at lower levels.
Mike Burt, head of procurement practice at the Treasury, said: "We need ministerial endorsement of better procurement and the Prescott initiative will commit his colleagues to that.
"Unless you get leadership from the top, nothing is going to happen. Steve Robson's taskforce will get senior officials' backing and the action plan to be launched by Alan Milburn will affect those at the coalface."
But Burt played down the threat of cuts to departments' budgets. "I think a letter from the deputy prime minister is stick enough. We want a positive relationship with departments in implementing the initiative," he said.
In parallel with the central government initiative, a letter to the Local Government Association chairman Sir Jeremy Beecham is designed to move councils away from their traditional "cheapest is best" attitude.
