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Willmott offers cuts advice to clients

Willmott Dixon has produced an action plan to show public sector clients how to cut costs without having to stop schemes altogether.

In the face of impending public spending cuts, the contractor has produced a paper detailing ways to reduce cost wastage.

Willmott Dixon’s latest results for the year to 31 December 2009 revealed a 69 per cent increase in turnover to £998.9 million.

But around 65 per cent of the firm’s turnover comes from the public sector, leaving chief executive Rick Willmott concerned about where the public sector axe may fall following the emergency Budget on 22 June.

Willmott Dixon’s paper highlights four areas where money can be made to go further in delivering new or refurbished facilities.

Mr Willmott said: “Rather than bemoaning spending cuts, business is all about adapting. This is about finding ways to help clients get more value for money.”

The first point highlighted is co-locating facilities, with an example given from one of the contractor’s projects in the North-east.

Gateshead Primary Care Trust and Gateshead Council co-located a primary care centre and leisure centre, saving both clients about 20 per cent on capital costs.

The second point is improved procurement efficiency, with the firm’s part in the Scape framework offered among the examples.

That agreement sees Willmott Dixon pre-qualified for all projects up to £30m, showing how clients can save time and money by not advertising through the Official Journal of the European Union.

The third point is to find opportunities to mix new-build and refurbishment work.

At Macclesfield High School, Willmott Dixon saved 22 per cent of the cost of an entire new build through refurbishing one-third of the school and rebuilding the rest.

The contractor’s fourth point is to merge capital and operating expenditure to allow clients to judge full life cost of projects.

The retrofit of New York’s Empire State Building saw its annual energy bill almost halved.

Willmott Dixon’s strong performance in 2009 included £260.3m of turnover from social housing arm Inspace, which was brought back under the group’s control in January 2008.

The firm’s pre-tax profit rose to £18.2m from £12m and it has secured 85 per cent of its targeted 2010 turnover, as well as up to 35 per cent of 2011’s.

A key target for Willmott Dixon is to increase its turnover from private development.

Its move into mixed-use urban regeneration took a step forward last week with a £250m win for a retail, residential and office scheme in Woking in a joint venture with developer Carisbrooke.

“We are trying to steer our own destiny by creating private sector workload for ourselves in mixed-use development,” said Mr Willmott.
“We are hoping that within about five years a very decent proportion of our profits will come from the development side.”