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Public sector league table reveals 20% drop in construction spending

Kier won more public sector work than any other construction firm in 2012 and 2013, securing an average of nearly £60m a month, according to a new report.

The figures were revealed in the Whitehall Monitor Bulletin, a report by think tank the Institute for Government and data analysts Spend Network.

According to the report, the government spent just under £5bn purely on construction services, with 2012 markedly outperforming 2013, which saw a 20 per cent drop in spending from £2.7bn to £2.1bn.

Over the two-year period eight contractors banked £6.2bn of government funding, with Kier topping the mini league of eight contractors with £1.4bn, ahead of Balfour Beatty, Carillion, Willmott Dixon, Amey, Babcock, Interserve and Bam.  

When Kier bought May Gurney last year it said the combined firms would have work with 65 local authorities in total.

FirmSector2012 £m2013 £mTotal £m
Balfour BeattyConstruction576371947
Willmott DixonConstruction385302687

Babcock’s work, at £652m, is classified as defence rather than construction, while Interserve’s £630m is classed as a facilities provider.

The construction sector was the second-largest recipient of government money behind IT, on which £8.8bn was spent. Outsourcing was third with a total bill of £2.2bn.

The figures have been collated from 38m transactions across 247 government bodies.

The report’s authors welcomed an improvement in levels of government transparency, while also making three main recommendations to the government:

  • Set clear standards requiring the publication of far greater information on contractual terms, levels of performance and subcontracting arrangements.
  • Establish a reporting regime for private finance initiative contracts and joint ventures that allows the public to identify commercial beneficiaries.
  • Lower the £25,000 threshold for publication of public sector transactions to £500 for all public sector entities.

The Institute for Government’s lead on the report Gavin Freeguard said: “It reflects well on the government’s commitment to transparency that we’ve been able to produce this analysis of independent suppliers to government.

“Nonetheless, this research shows how difficult it is to analyse who is contracted to provide our public services and what it costs.

“Cost is also just one part of contract transparency; government needs to be equally transparent about contract terms and the performance of suppliers funded by taxpayer money.”

*The Capita group, which has a construction consultancy, also made the top 20, coming in at number four with earnings of £1.45bn under the outsourcing category

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