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Industry hails plan to tackle £15bn productivity gap

Industry figures have welcomed a new long-term government plan to tackle construction’s productivity gap, aimed at saving £15bn a year. 

A 43-page document entitled Transporting Infrastructure Performance was published this morning, setting out plans to change the way infrastructure is planned, procured and delivered. 

Alongside these papers, the government confirmed a new £600bn pipeline of UK infrastructure projects covering the next 10 years. 

The productivity plans include creating a new Infrastructure and Projects Authority (IPA) benchmarking team to “define cost and performance benchmarks”.

The IPA also vowed to help drive the uptake of offsite construction by identifying “obstacles to faster uptake”.

It follows a commitment in last month’s Budget to favour offsite construction on major public projects from 2019.

Mace’s consultancy chief operating officer Jason Millett said the guidance on infrastructure delivery and the new pipeline “show a clear commitment from government to work with the private sector to change how we design and deliver infrastructure for the better”.

But he added: “It’s now up to contractors and consultants to show that we’re up to the challenge.”

What government wants

IPA’s chief executive talks to CN about PF2, contractors’ woes and the offsite revolution.

Mark Farmer, the author of last year’s government-commissioned Farmer Review and chief executive of consultancy Cast, said: “This type of joined-up thinking between government and industry is exactly what my review called for, and will help build the construction industry’s capacity to deliver the economic and social infrastructure our country desperately needs in the face of unprecedented structural changes.”

A separate strategy on boosting transport infrastructure efficiency has also been published

David Whysall, head of infrastructure south & UK commercial services at Turner & Townsend, said: “The important achievement here is that we have a set of practical, measurable and realistic steps which are shared across industry. In transport, we now have a clear efficiency agenda that’s supported by all of the major infrastructure delivery operators.” 

Writing in the foreword of the Transforming Infrastructure Performance document, secretary to the Treasury Andrew Jones said: “The construction sector faces issues such as low profit margins and lagging productivity compared to other sectors of the economy.

“It is vital that we address these issues if we are to deliver this investment as efficiently as possible.”

Speaking ahead of the announcement, IPA chief executive Tony Meggs told Construction News the government’s ability to offer better salaries to procurers on its biggest projects will enable contractors to “make proper money”

The industry is also set to receive £170m in government funding for R&D and innovation over the next three years as part of its sector deal from the government’s industrial strategy.  

More details on the £600bn pipeline are expected today. 

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