A National Audit Office (NAO) report has revealed that £2.6 billion of taxpayers’ money is being wasted each year because of poor management of public sector construction projects. The report states that although some government bodies have improved, others are ignoring best practice guidance provided by the Office of Government Commerce.

The report calls on all departments to act now to improve performance. It lists numerous actions including: using payment methods that avoid prolonged retentions; employing integrated teams and basing project design and decisions on whole life costs. The NAO estimates that between £500 million and £2.6 billion could be saved by adopting best practice.

“We are pleased that the NAO appreciates the significant contribution that early and full involvement of the specialist contractor can make to the successful delivery of a construction project,” said ECA director David Pollock.

Improvements have been made since the NAO’s last report in 2001. Between April 2003 and December 2004, 55% of public sector projects were completed to budget, compared to 25% in 1999 and 63% completed on time, as opposed to 34% in 1999.

However, Sir John Bourne, head of the NAO, said: “There remains scope for further improvement. Even if only 20% of the report’s improvements are practicable, this would release some £500 million to be reinvested in front line public services.”

Rudi Klein, chief executive of the SEC Group, said: “It is clear why the NAO wants the pace of change to increase, since it believes that further savings in annual construction expenditure are possible if good practice is applied across the sector.”

Source

Electrical and Mechanical Contractor