Strictly embargoed until
09:30 am on Thursday 31 March 2011 - Infrastructure delivery models
to be reformed
Issued by the News
Distribution Service on behalf of Infrastructure UK
A Government report by Infrastructure UK (IUK) today set out a
detailed Implementation Plan to reduce infrastructure construction
costs by £2 to £3 billion each year.
The Implementation Plan sets out a detailed programme of
activity through 2011 and beyond to realise the savings which were
first identified in the Infrastructure Cost Report of December 2010.
The key elements of the Implementation Plan are:
* A charter between the construction industry and Government
that sets out the behaviours expected in future relationships.
* Detailed measures that build on those announced by the
Chancellor in Budget 2011 and Plan for Growth last week which will:
- improve the ability of industry to plan effectively, by
Government publishing a rolling forward programme for investment;
- encourage greater innovation by introducing new models of
competition and procurement;
- increase industry confidence by developing more effective
governance for public sector projects and programmes;
- reduce waste, for example by establishing a common set of
principles for the management of contingency budgets; and
- improve value for money by establishing a data group
between the public sector and industry practitioners to develop
the extended use of cost benchmarking in infrastructure delivery.
* A Joint Programme Management Board to be chaired by Paul
Morrell, the Government’s Chief Construction Adviser, which will
ensure that the activities are implemented consistently with
measures across the wider public sector.
These measures are focused on economic infrastructure; mainly
civil engineering works in the water, waste, transport, energy and
telecommunications sectors. Implementing them will contribute to
the Government’s wider commitment to reform the way in which it
procures public sector construction and infrastructure to reduce
costs by up to 20 per cent. The Government will be publishing
further detailed measures relating to wider public sector
construction and procurement before the end of May 2011.
Infrastructure UK will continue to lead the implementation
plan, working across Government and with industry to help deliver
the benefits in ongoing projects and programmes, as well as future
investment. Infrastructure UK is already working with the Highways
Agency, High Speed 2, the Environment Agency and with private
sector companies in the water industry to help embed new practice
in forthcoming major programmes.
Lord Sassoon, Commercial Secretary to the Treasury, said:
"Investment in the UK’s infrastructure is running at
about £40 billion a year. We must ensure that we use public
funding more efficiently and the Infrastructure Cost Review has
identified savings of up to £3 billion a year. This report
provides detailed measures that will unlock these savings,
redefining the way in which Government, regulated utilities and
the construction industry do business together."
Paul Skinner, Chairman of the Infrastructure UK Advisory
Council, said:
"Reducing the costs of infrastructure is a core
activity for IUK and a key element in the National Infrastructure
Plan. I welcome the Government’s commitment to realising the
benefits available as set out in the plan published today. There
is a lot of hard work still to do across Government, but a real
opportunity to make a step change in the way in which
infrastructure is delivered."
The report was welcomed by key industry players, including
Darren James, Managing Director of Costain:
"Costain welcomes the publication of this
Infrastructure Cost Plan and we look forward, together with our
industry colleagues, to working with Government to deliver the
benefits from the wide ranging improvement objectives set out in
this report. The actions in this plan represent an excellent
opportunity for the whole construction industry to improve the
efficiency in delivering infrastructure projects and to develop
more effective relationships throughout all levels of the supply chain."
Notes to editors
1. IUK is a unit of the Treasury focused on enabling greater
private sector investment in infrastructure and improving the
Government’s long term planning, prioritisation and delivery of
infrastructure. Further details are in the National Infrastructure
Plan and on the Treasury’s website: http://www.hm-treasury.gov.uk/iuk_cost_review_index.htm.
2. IUK published the first National Infrastructure Plan in
October 2010 that identified £200 billion of public and private
investment in the UK’s economic infrastructure planned over the
subsequent five years. About 60% of this investment is already
made through the private sector and this proportion is expected to
rise, particularly as a result of growth in energy sector investment.
3. IUK published its Infrastructure Cost Report on 21
December 2010, which concluded that costs of delivering
infrastructure in the UK are excessively high and that very
substantial savings are achievable, worth an estimated £2-3
billion per annum. The construction element of infrastructure
investment is worth about £15-20 billion per annum.
4. The President of the Institution of Civil Engineers (ICE)
has today announced the names of industry “champions” who will be
the focus for ongoing collaboration between the Government and
industry, hosted by the Institution of Civil Engineers, to ensure
that these measures become embedded in practice. The industry
champions will be Simon Kirby, Professor Brian Collins and Stephen Fox.
Support from industry and government
5. Peter Hansford, President of ICE, said:
"The Institution welcomes this implementation plan
and has been delighted to be a part of the stakeholder group that
has worked with IUK to develop it. For these measures to be
successful it will require the public and private sectors to
continue to work together and ICE will be coordinating a series of
implementation groups, each headed by a
"champion" drawn from across industry. These
designated working groups will be the focus for collaboration
going forwards."
6. Paul Morrell, the Government’s Chief Construction Adviser, said:
"Government is striving to speak with a coherent
voice to the construction industry, whilst recognising the
different challenges that face different sectors - in
infrastructure, house building and the wider built environment.
Developing the joint programme board will enable this essential
programme for infrastructure reform to be implemented in a way
that is integrated with wider initiatives for construction as a whole."
Non-media enquiries should be addressed to the Treasury
Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk
This Press Release and other Treasury publications are
available on the HM Treasury website hm-treasury.gov.uk For the
latest information from HM Treasury you can subscribe to our RSS
feeds or email service.
Media enquiries should be addressed to the Treasury Press
Office on 020 7270 5238.
Contacts:
NDS Enquiries
Phone: For enquiries please contact the issuing dept
ndsenquiries@coi.gsi.gov.uk