Press Release - Improving Public Services through Better
Construction
15 March 2005
Sir John Bourn, head of the National Audit Office, reported
today on the progress that departments and their agencies have made
to their construction delivery performance since his 2001 report
“Modernising Construction”. He concluded
that there had been a considerable improvement in completing
projects to time and cost and that real savings were being
delivered, in particular, by departments and agencies which had
adopted partnering and collaborative approaches to their
construction work.
Between April 2003 and December 2004 55 per cent of construction
projects were delivered to budget compared with 25 per cent of
projects in 1999. If this improvement is scaled over the £33.5
billion spent on public sector construction in 2003, then the
improved performance is likely to have avoided overspends of some
£800 million. In addition, 63 per cent of projects were delivered
to time compared with 34 per cent in 1999. The reasons for improved
performance are varied but the guidance and support provided by the
Office of Government Commerce (OGC) has made a considerable
contribution.
A range of value for money gains from partnering and the early
involvement of integrated supply chain teams are also beginning to
emerge from improvement programmes of the public and private sector
case study organisations included in our 2001 report. These include
streamlined procurement processes, innovative solutions to the
design and delivery of construction projects and improved whole
life costs. Based on National Audit Office estimates, between £500
million and £2.6 billion in annual public sector construction
expenditure could be saved if similar good practice was applied
across all of the public sector.
Despite the progress that has been made, departments and their
agencies need to develop further their and their partners’
construction delivery performance to improve the quality of public
services and the efficiency with which they are delivered. For
example, partnering and collaborative approaches need to be adopted
more widely and construction related decisions need to be taken on
the basis of the implications for all costs and benefits over the
full operational life of built assets.
Today’s report makes nine recommendations to departments,
including the need for them to create more certainty in the market
by providing longer-term funding to maximise the benefits of
collaborative working, to strengthen the leadership of construction
programmes and projects and put in place strategies for developing
construction management capabilities, to manage their construction
activities in light of the Government’s aims for sustainable
development and to make construction procurement decisions based on
whole life value. The recommendations are illustrated by practical
examples of good practice drawn from both public and private sector
clients and set out in an associated volume to the main report.
In addition, the report makes recommendations to assist the OGC
target its advisory and support activities including improving the
co-ordination and leadership of public sector construction
activities and making better use of the available information on
lessons and best practice on projects so that this can be shared
for the benefit of the public sector as a whole.
Sir John Bourn said today:
"Departments and agencies have had a reputation for
delivering construction projects that were late or over budget and
designing buildings that were not cost effective to operate. There
has, however, been a considerable improvement in performance since
my last report on the subject in 2001 and one of the significant
contributory factors to this progress has been the work of the OGC
in promulgating best construction practice, providing support to
departments, and applying the Gateway Review scrutiny process to
construction projects. Departments cannot, however, be complacent.
There remains scope for further improvement and my report makes
recommendations and highlights good practice that will enable
departments to achieve better performance and identifies how the
OGC can support them through its advisory and support activities to
deliver maximum benefit in improving construction capability and
performance across the wider public sector. Even if only 20 per
cent of these improvements are practicable this would still release
some £500 million to be reinvested in frontline public services or
higher quality built assets to deliver improved public
services."
Notes for Editors:
- This report is supported by a volume of ten case examples of
construction projects drawn from both the public and private
sectors. The good practices that are identified in the case
examples cover a number of approaches which have all had an impact
on enabling the organisations involved to improve their business
efficiency and the quality of services they deliver to end
users.
- Press notices and reports are available from the date of
publication on the NAO website at www.nao.org.uk. Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 24/05
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