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Wates FD calls for government to look beyond infrastructure

The government needs to give schools, hospitals and housing the same focus it is placing on large scale infrastructure, according to Wates finance director Huw Davies.

Mr Davies was speaking as the private firm revealed 2011 results, with revenue up by 13 per cent to £1.12bn on last year, but pre tax profit down seven per cent to £40m.

He said:  “We need some kind of stimulus around capital expenditure, and more of it in the built environment rather than infrastructure; certainly around education, health and social housing.

“There is a big shortage in terms of primary schools at the moment and that needs to be addressed, and there are housing issues.”

Mr Davies said there have been “so few houses built” in the last two or three years that there is a “massive catch up required”, and a lot of old housing stock in need of planned and responsive maintenance.

The FD added that the private finance initiative debate is dragging on too long.

He said: “We just wish they would get on with the private finance initiative.  There’s obviously a shortage of public funds.

“(People) talk about new, simpler forms of it – just get on with it.”

The industry has its own challenges, added Mr Davies, including the ongoing problem of heaping undue pressure on sub contractors and chasing cheapest price.

“You will have seen an enormous number of sub contractors and suppliers going out of business in the first quarter of this year,” he said.

“We are very keen to pay in accordance with the contracts.  I think that means that that does provide protection around a lot of the sub contractors that we use.

“But not everyone is like that.  I think that there is some undue pressure put on by the sector as a whole.”

He added:  “I think we can only have a sector which goes for least cost for so long; there will have to be a step change in terms  of the sector as a whole as we go forward.”

Mr Davies believes clients are becoming more aware of early collaboration on design and sustainability.

“More clients are I think realising that the lowest cost is not always the best value,” he said.

“We collaborate at the earliest possible stage, and I think that it does mean that customers are becoming more aware of the risks of a lowest cost strategy. I think people are waking up to that.”

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