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One in four public sector clients to bin projects

One in four public sector clients expect to bin construction projects over the next six months, with the same number anticipating that they will ask suppliers to cut their costs, as a result of budget cuts.

The survey was carried out by Constructiononline, the government-owned pre-qualification body for contractors, consultants and material suppliers.

Local authorities are even more likely to cancel projects, with 35 percent saying they are likely to do so, while 50 per cent of housing associations plan on asking suppliers to slash prices and 33 per cent of health authorities say they expect to retender projects.

Only a third of public sector clients said that they wouldn’t be reducing their construction budget in the next six months. Almost 90 per cent also said they will try new methods to deliver savings, in attempts to keep projects in the pipeline at current price levels.

These methods include adding new contractors to supply chains (25 per cent), retendering for frameworks (21 per cent), price benchmarking future tenders (32 per cent), and retendering for projects (34 per cent).

Health authorities have been the most active in joining frameworks over the last two quarters, with 50 per cent signing up, in order to lower costs. Local authorities, police and universities have also been joining frameworks.

Constructiononline sales and marketing director Philip Prince said: “Despite the financial pressures public sector organisations are under, our survey has highlighted the positive steps many organisations are already taking to deliver effective savings.”

“In the last six months, nearly a third of public sector clients joined framework agreements and a further quarter started trialling new forms of framework working. Frameworks can guarantee certainty on time, cost and quality, which means greater predictability and a more timely and efficient programme of delivery.”

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