By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East
Last week, North East England Chamber of Commerce (NEECC) chief executive, James Ramsbotham, gave his support to Construction Alliance NorthEast Construction Charter, which calls for a total re-think on public procurement.
Construction Alliance NorthEast (CAN) is a collection of construction and engineering bodies formed to represent the interests of over 500 regional construction and contracting SMEs which rely largely upon successfully tendering for public sector contracts using industry procurement processes. CAN is calling for a re-think on public procurement practice so that regional SMEs get more of an opportunity to tender for this kind of mid-range construction work.
Two years on, CAN’s message is starting to gain traction with several industry bodies as well as regional MPs (ten have already agreed to sign it). They can see that reform of the procurement process is not only necessary for the industry overall but is vital for the region. I know from the high calibre of entries we get in our annual Constructing Excellence Awards that there are many talented companies in the region which are more than capable of building a £5m school extension, for example, but so often this kind of work is given to a national firm, simply because they are on a national framework.
Our role is to support the interests of the entire industry, so it would be wrong of me to take sides, but if a common-sense approach prevailed, there would be no need to use a sledge hammer to crack a nut. It is a great pity that a major contractor like Carillion must fail, before anyone starts to question the effectiveness of the national policies that led to its downfall. James Ramsbotham’s view, that too many public-sector contracts are concentrated in the hands of a small number of large businesses which use their scale to win work, is exactly what seems to have been happening in the case of Carillion.
CAN’s primary message to local authorities and any public-sector procurement organisations is to adopt an ‘intelligent’ approach to procurement and focus more on increasing local contractor participation – ‘hear, hear’ to that.
CAN is asking for contractor selection to be matched to the size of the project being procured, large contracts to large contractors, smaller ones to smaller contracts. It does no harm to reiterate the importance of the construction sector to the regional economy. Not only does it account for 8.5% of all jobs in the region, the Construction Industry Training Board research tells us that for every £1 spent on a construction project, £2.84 is generated for the local economy, provided that all aspects of the process are undertaken locally. It is clearly in all our interests that as much of this work as possible is carried out by local firms.
James and his team at the NEECC have been huge supporters of ‘buying local’ for many years. Perhaps now, we should all act on their advice.
For more information, contact Philippa Clothier at Clothier Lacey & Co on 0191 273 9897.