Stuart Miller and James Ramsbotham. Construction Alliance North East.
Stuart Miller with James Ramsbotham. Construction Alliance North East.

Chamber backs construction charter urging need for new approach to procurement.

North East England Chamber of Commerce (NEECC) chief executive James Ramsbotham, has given his support to Construction Alliance Northeast’s (CAN’s) Construction Charter, which calls for a total re-think on public procurement.

CAN was launched two years ago to represent the interests of over 500 regional construction and contracting SMEs which rely largely upon successfully tendering for public sector contracts using industry procurement processes.

CAN’s message, for creating greater stability and sustainability in the industry by making more of a level playing field for regional SMEs, has been warmly received and an increasing number of industry bodies, local authorities and MPs have given it their support, hailing it as a sensible way forward for reforming the procurement process.

CAN’s primary message to local authorities and any public sector procurement organisations is to adopt an ‘intelligent’ approach to procurement and focus more on increasing local contractor participation.

CAN is asking the public sector to look beyond the box ticking process which has seen so many regional, yet highly experienced contractors locked out of the procurement process because their turnover is deemed to be simply not high enough. This lack of opportunity from the public sector has led to job losses and instead, places on frameworks have been offered almost exclusively to national firms.

CAN is asking for contractor selection to be matched to the size of the project being procured, large contracts to large contractors, smaller ones to smaller contracts.

Speaking about the need for reform, James Ramsbotham, said:

“There has never been a more important time for reforming the procurement process. What Carillion’s unfortunate downfall underlines is that too many public sector contracts are concentrated in the hands of a small number of large businesses which are using their scale and experience to tick all the boxes and win even more work.

“Public procurement needs a complete overhaul and it is a tragedy that a company failure of this scale needs to occur before the industry wakes up to the problem. The construction sector is a major contributor to the regional economy and accounts for 8.5% of all jobs in the region, so it is essential that we do what we can to ensure that as much of this work as possible is carried out by local firms.”

Stuart Miller, chair of CAN, added: “We are delighted to have the support of the Chamber for our Construction Charter. The Chamber has been a huge supporter of the need to ‘buy local’ and has been lobbying government on this topic for many years.

“While the industry is deeply affected by the sad demise of Carillion which will leave its mark for many years to come, it is essential that confidence in the construction sector remains strong. We must ensure that important lessons are learned.

“Through our Construction Charter, we have set out a six-point plan for public procurement reform and the first of these is for a greater focus on increasing local contractor participation. This is essential if the sector is to flourish. We know from CITB research that for every £1 spent on a construction project, £2.84 is generated for the local economy, provided that all aspects of the construction process are undertaken locally.

“We also ask for a greater focus on the inclusion of social, economic and environmental considerations within the tendering process as well as the banding of projects to cater for smaller/medium value works as distinct from higher value work.

“These three areas of change alone would give a far greater number of regional SMEs a chance to claw back some of the work they lost during the recession and this can only aid the regional economy.”

CAN is funded by Northern Counties Builders Federation, Civil Engineering Contractors Association and National Federation of Builders and is supported by the Federation of Master Builders. Regionally, these four organisations represent companies which employ over 100,000 people and have a combined turnover of £3 billion.

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