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Leadership council to debate new supply chain charter on payment

The Construction Leadership Council will meet next week to discuss a proposed new industry supply chain charter ahead of its publication in the first quarter of this year.

Chief construction adviser Peter Hansford told Construction News the charter has been drafted by the Institute of Credit Management and will examine issues including prompt payment.

He said the charter is likely to seek voluntary sign-up from contractors, but could not say whether it would supersede initiatives such as the government’s prompt payment code, which has come in for criticism for not being effective enough.

“I don’t know if it will supersede other [initiatives], but it will certainly inform them,” he said.

Tier one contractors have criticised the use of project bank accounts in recent months, but Mr Hansford said PBAs were just one issue and that “the bigger issue is about prompt payment and issues associated with retention and transparency”.

“They are all in the area of getting a fair supply chain charter that industry can sign up to,” he added.

Mr Hansford was setting out examples of work being carried out following the publication of Construction 2025, the industrial strategy for construction.

Industry leaders have complained to Construction News that not enough has been made public about the work of the Construction Leadership Council and its working groups since the strategy was published in July 2013.

Mr Hansford said: “These things take a while to bed in, but you’re right and we’re conscious of [not promoting the work being done].”

An implementation plan is due to be published by Easter, which Mr Hansford said will convert the long-term strategy into a series of shorter-term targets and set out how the various themes would link together.

Among the proposed plans are the development of a local authority procurement strategy through local enterprise partnerships by next year; implementing three-year pilot work pipelines for non-government sectors; and identifying and agreeing key performance indicators with the CLC to enable tracking of progress against the strategy’s ambitions, including 50 per cent reduction in carbon emissions and 33 per cent reduction in construction costs on projects.

Mr Hansford added the group is working on a communications plan and is starting to look at whether it should publish a skills pipeline that could sit alongside the government construction and infrastructure pipelines.

“I know what it’s like whenever nothing’s coming out; people think the worst and where there’s a vacuum of information people will fill it with intrigue and say everything is going wrong – so we want to be much more transparent,” he said.

Sir David Higgins will continue to co-chair the leadership council with business secretary Vince Cable, despite the former’s impending move to be full-time chairman of High Speed 2 in March.

The council, which has 30 members including construction minister Michael Fallon, Crossrail chief executive Andrew Wolstenholme and Laing O’Rourke chief executive Anna Stewart, meets for a third time next week.

Sounding board for government

Mr Hansford admitted that a large part of the most recent CLC meeting in October focused on housebuilding skills, and said the council was also a forum for government to hear about industry concerns separate to Construction 2025.

“One of the things the council has been looking at is skills for housebuilding. [Construction 2025] mentions it, but doesn’t give a great deal of emphasis to it.

“You talk about what’s changed since we published it; we’ve seen a great deal of emphasis on housebuilding in the last quarter of last year.”

He said the council could “absolutely” be used as a sounding board for government, but rejected the suggestion that schemes such as HS2 could come under discussion, as the council was “not focused on individual projects”.

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