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Where's the cash for r cour ts?


Within the next month the Department for Constitutional Affairs is expected to announce its planned future building programme.But, with the sector renowned for delays and mismanagement, will there be anyone interested in the work, asks Alasdair Reisner

THE CONSTRUCTION industry is waiting for its day in court.Over the past few years it has had to sit and twiddle its thumbs while a jury deliberates over an important decision.

But for once the industry is not the defendant, waiting for punishment over some breach of health and safety regulations or seeking the resolution of a long-running battle for payment.

It is the court system itself that the industry has focused its attentions on.Since the beginning of the decade schemes to build new Crown and Magistrates' courts have been thin on the ground.

Even those schemes that have been given the go-ahead have struggled through procurement after all future court building was stymied by the progression of the Auld Review into the justice system and the Court Act 2003.

The £45 million Avon and Somerset Courts project that was signed by an Amey/Equion/Mowlem team in August was originally advertised back in February 2000, while a major PFI deal to upgrade Birmingham's magistrates' courts is still sitting in limbo, two years after firms originally expressed interest in it.There have been similar delays to schemes in Gloucestershire and Bedfordshire Central to the results of the Auld Review was the call to combine the Magistrates' and Crown Courts under one new umbrella body - Her Majesty's Courts Service. Following this move comes the decision that the contractors are waiting for - how many new court buildings will be built as a result of the process of rationalising the court estate? And when will they come out to the market?

HMCS comes into being on April 1 next year but the date that contractors should have their eye on comes later this year as HMCS's parent, the Department of Constitutional Affairs, decides on its financial targets for the next two years in the wake of the 2004 Spending Review.

While a spokeswoman for the department is blandly stating '. . . it is hoped that announcements will be made on the department's building programme by the end of the year'other sources within the department claim that the details are due out later this month.

Whenever the decision is made it should open the door to smoother procurement of courts according to those that work in the sector.

'It will really speed up the process, ' said Stephen Kenny, partner at law firm Wragge and Co, which specialises in court developments.'In the past the problem has been that new magistrates' courts have been the responsibility of local authorities and local magistrates committees.Any given authority member may only procure one court in their career, so there is no continuation of knowledge.With the Department of Constitutional Affairs in charge of the process it should be catalysed.'

He points out that, with all court procurement going through the department, the door has been opened for standardised contracts, making bidding easier for both the department and bidders.

But a business development manager at one firm that had previously been interested in building courts said that it would take a lot to entice his firm back to the sector.

He said: 'The problem for the DCA is that it has inherited a bad press from its predecessor, the Lord Chancellor's Department. It had an awful reputation for its management of its stakeholders such as the local authorities and magistrates. Firms like ourselves found it commercial suicide to get involved in schemes that would either be delayed for years or run off the tracks entirely.'

He added that, with little or no courts projects in procurement over recent years, many firms that used to work in the sector have disbanded the specialist teams they may have assembled, losing much of the in-house knowledge that would have helped them bid for future projects.

There are also concerns about how much work comes out.While one DCA source talks bullishly about work programmes valued at up to £1 billion, contractors are less convinced.They point out that there are other Government work programmes such as ProCure 21 and NHS Lift in health and Building Schools for the Future in education that are making demands on the Treasury's coffers and that these sectors are more likely to be seen by the Government as vote-winners at the next election.

But Mr Kenny is assured that work will come out - and in a way that will be attractive to the industry.He said: 'The department has given me a lot of confidence because it has done a lot of work to ensure that schemes will not come out to the market until all of legal issues that could delay progress have been sorted out.'

But reputation problems are not the only issues that the DCA will have to deal with if it is going to convince the construction industry to come back to the court building sector.

One contractor said: 'These court schemes tend to cover a mix of refurbishment and new build.With new build you have to do something with the old court buildings.They are often listed so there is very little that they can be converted into easily. If they are to be refurbished then any listing can make this a design nightmare, particularly following the introduction of the Disability Discrimination Act.

'Either way, each job tends to involve a bespoke approach to design for each building with little in the way of continuity or standardisation.That costs time and money, which doesn't really make jobs like courts that attractive, particularly when there is so much work available for us in other sectors.'

With many firms that previously worked in the sector having been scared off by the long delays and cancellations under the Lord's Chancellors Department, the DCA may struggle to find firms to deliver its programme.

With this in mind sources at the department claim it may have to court the attention of smaller contractors.

A DCA insider said: 'We are very keen to open up opportunities for small and medium-sized contractors.These may be firms that do not have the resources to bid for a Private Finance Initiative contract but we may be able to put jobs together into similar but smaller private developer schemes, valued under £20 million.'

Private developer schemes, where the court is built by a developer and then leased back to the DCA, have been used in the sector before. But these schemes may not attract the expected level of interest, according to Giles Frost of property group Babcock & Brown.

He said: 'In essence these private developer schemes are just like PFIs in that the firms have to invest their own money.They have to deliver the courts by a given date and there are massive penalties if they fail to do so.That is the kind of thing that scares firms off.'

Within a few weeks these issues will become pressing as the DCA is told exactly how much money it has to spend and is expected to get on with it.

If the department is given a decent budget and can shrug off the reputation of its predecessors then there is no reason why it cannot usher in a new boom of court building, especially as new schemes at Gloucestershire, Bolton and Salford, Cheshire, Essex and Gwent are due to come out in the next 12 months.

If not, then the DCA will be found guilty as charged by the construction industry.