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The Treasury 'must tackle procurement'

Latham calls for senior minister to take control

INDUSTRY reformer Sir Michael Latham has called for the Treasury to take direct control of construction procurement.

Speaking at a London conference held to mark a decade since the first Latham construction review, he said: 'Someone senior like Paul Boateng, the chief secretary to the Treasury, should become responsible for procurement.

'This would send a clear message to all Government departments that they should take good practice seriously.'

Sir Michael also called again for a Department for the Built Environment to be established.

He said: 'I have put this very strongly to the National Audit Office inquiry into construction, which is now taking place.

'I hope the Prime Minster will rethink the changes introduced in 2001, which saw construction spread across more than six departments of state.

'We need a strong single department bringing together all construction interests including transport to help develop consensus on policies such as sustainable communities.'

Sir Michael, who chaired the recent review of the Construction Act, said he believed the Government was still 'doubtful about what to do' He said that in his view the Government was 'likely' to overturn adjudication contract clauses forcing referring parties to pay costs.

He added that it was also likely to favour banning cross-contract set off and giving a right to reimbursement of costs where contractors suspend works because of non-payment.

But he added that it was 'unlikely' to overturn the British Eagle legal precedent, which stops clients paying money directly to subcontractors when main contractors go bust.

Sir Michael said he expected the Government to publish its industry consultation document 'within the next couple of months' He added: 'There will be several months for wider consultation and the minister will then decide but not before the summer.

'The Government is still doubtful about what exactly they should do - it is all to play for still.

'Gordon Brown rarely does nothing and the only certain thing is there will be lots of lobbying.'

He added that the Government could use a regulatory reform order for generally agreed recommendations or potentially use a new Bill to introduce disputed reforms.