Are we nearing a public sector procurement reform?

Construction industry reform

Scottish public sector construction is vitally important to the Scottish economy with an annual expenditure of around £4 billion. The last few years however have seen both the construction industry and public sector face a host of additional challenges. Public sector spending cuts, rising building costs, supply chain issues and inflated material and labour costs are just some of the issues the sector has had to contend with. And there will no doubt be further challenges ahead in terms of cost pressures, the transition to net zero construction and reduced public sector spending. However, the Scottish Government’s recognition of the need for reform in the construction industry and the crucial role public sector construction procurement plays in driving improvement and success across the industry is a significant opportunity for change.

Influencing change within the construction industry

The formation of the Construction Leadership Forum, collaborative industry workshops and the development of the Scottish Construction Accord is identifying what good looks like, key areas of focus and necessary change for the industry. A recent government survey incorporating public and private sector organisations highlighted that 80% of responses agreed or strongly agreed that public sector procurement of construction in Scotland needs reform. A clear indication that change is required to what traditionally can be an archaic, unnecessarily complex, lengthy and expensive process for both contractors and clients.

Despite the warnings against heavily weighted price versus quality approach to tendering we do continue to see the traditional race to the bottom approach being applied. Should this mean the end for prioritizing lowest cost and commercial evaluation over quality? The Construction Quality Improvement Collaborative (CQIC) state that quality should be central to all decision making and therefore quality should at least be equal to cost if not prioritised.

It is clear that efforts are being made to engage with the construction industry to collate feedback and thus influence change.

Opportunities for change

There is also a need to acknowledge the work that has already been progressed across the UK.

Constructing the Gold Standard is an independent review of public sector construction frameworks undertaken by Professor David Mosey which identifies the benchmark for ‘gold standard’ public sector procurement. With recommendations to the public sector for the delivery of efficient, cost effective, collaborative and greener projects. The Scottish Construction Accord, highlights the need to reform procurement practices, and is billed as a “commitment between industry and the public sector to create a thriving and high-performing construction sector in Scotland.” This gives the industry a platform for change, but going forward we need action, engagement and momentum to progress that reform. Allowing detail and substance to be built into the principles and objectives of the Accord and we will, as an industry, start to witness the improvement.

At SCAPE Scotland we believe there is opportunity for change, for growth and we strive to make procurement count for every client, for local communities, for the economy and for Scotland as a whole.

This article first appeared in Scottish Property Federation's August Voice 2023.