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Firms 'must drive a hard bargain'

Driving a hard bargain may be essential if public and private-sector construction companies are to survive the recession, according to research.

The Gap Partnership and the Centre for Economic and Business Research report that better negotiating skills could save the industry a combined £9.7 billion a year, or 4 per cent of operating costs.

Both organisations stress that ensuring a profitable contract requires a high level of skill, and applies equally to public and private-sector businesses.

Gap founder Steve Gates said: “Negotiating is an essential skill to help the Government and company boardrooms to tighten up performance in this uncertain climate. Having braced themselves for higher taxes, hard-pressed citizens need to be reassured of value for money.”

And CEBR economist Ben Read added: “A tighter approach to procurement could go some way to plug the £60 billion of public spending cuts we estimate will be required to stabilise Britain’s debt GDP ratio by 2016.

“Even the Treasury’s optimistic recovery projections result in a worsening deficit for the Government, and as a result it will be forced to face fiscal retrenchment.”