We’ve been talking for a long time – more than a decade, in fact – about the dwindling financial resources with which the public sector has been continually asked to deliver critical services and infrastructure upgrades.
Halfway through a year that promised to see the funding tap turned back on, it appears that coronavirus has instead drank the well dry. I read with grave concern recently the findings of a new BBC investigation that identified a £3.2bn funding shortfall across almost 150 local authorities nationwide. To provide a sense of scale, Birmingham City Council – the largest authority in Europe – is forecasting a shortfall of £212m across the next two years, despite receiving £70m of central funding. It is clear that authorities across the UK share comparable concerns. Without intervention, the prospect of critical services being reduced or even scrapped is a very real and present danger.
Of course, few would have predicted that the arrival of a global pandemic would be (in this case weighty) the straw that broke the camel’s back. We are now faced with some tough realities and significant challenges to overcome. But overcome them we shall – as we have on many occasions including the extended period of austerity that closed off the last decade.
Putting the ‘build’ in building back better
Following December’s General Election result, one of the priority areas that had been earmarked to benefit from a loosening of the public purse strings was the built environment.
Recent government announcements, including the latest Summer Statement and Boris Johnson’s promise to ‘build, build, build’, all indicate that the public sector will be at the forefront of the UK’s long-term economic recovery. If we are to maximise the use of this interventionist approach from government, it will require a renewed commitment in collaboration between councils, contractors and consultants.
The first bridge that we must cross is the reinstatement and acceleration of projects that have fallen behind schedule as a result of lockdown. More than 95% of sites have re-opened this month, with productivity slowly increasing as they come to terms with the realities of working with social distancing. The new ‘one metre plus’ policy will help further but, even with the exemplary new safety standards we’re seeing implemented across our sites, the path to pre-COVID productivity levels will take time.
We are all aware by now that costs and timescales agreed before lockdown are, in many cases, no longer realistic. But, I’m a firm believer in compromise and open dialogue – when the first reaction might be one of litigation or dispute. The most sensible route to maintaining the health of a relationship between local authorities and contractors is to follow the process and keep talking. Our guidance to our colleagues immersed in project delivery, is to place their faith in the mechanisms of NEC contracts and specifically Clause 60.1, which provides a comprehensive framework to deal with unforeseen events.
We simply cannot afford to enter into the blame game.
Procurement in testing times
Another reaction we must avoid is a race to the bottom – this is an approach that has created reams of evidence that outturn costs can be much higher than originally expected.
As our attention turns to future project pipelines, including those that will flow from this summer’s stimulus announcements and, potentially, an Autumn Budget, we must hold our ground and continue on the path to quality execution with all of the learnings that we have gained since austerity measures were first implemented.
Procurement has its part to play in preventing regressive reactions and I believe that we have learnt from the mistakes of the past. The value of quality metrics used to award projects are now well established in local government and are unlikely to be dropped over night.
Particularly in the public sector, we must continue to make sure that contractors are procured with the input of experienced operators and that schemes, while remaining ambitious in their design, are fed by a quality brief, effectively planned through early contractor involvement and project managed meticulously to ensure a direct route to successful delivery.
Again, collaboration, open and honest dialogue and mutual trust will pave the way through the foggy conditions ahead. This type of behaviour will make up the fabric of the new frameworks we will bring to market later this summer and I’m looking forward to seeing the positive relationships that will flourish from their foundations.
We’ve all repeatedly achieved great results, despite resources being in short supply over the last 10 years.
Many in the industry will be hopeful for additional positive intervention in Rishi Sunak’s Autumn Budget. Until we receive further sight of the comprehensive measures government has in store to address the budget shortcomings I’ve outlined, we all must endeavour to push on in unison, towards a common goal.
Mark Robinson is chief executive at public sector procurement specialist, Scape