Going for Gold

Government has recently published the ‘Gold Standard’ and ‘Construction Playbook’, to help standardise the service expected for public sector construction works.

The Gold Standard and Construction Playbook are designed to ensure that the best possible spend outcomes are achieved in public sector developments, such as new roads, rail projects, schools, hospitals, and prisons.

Annual spend in this area sits at around £180bn. The Gold Standard sets out how the government and the construction industry must work together to tackle waste, secure value for money and drive innovation to achieve outcomes which are better, faster, safer and greener.

In this Q&A, we speak with Spencer Brown, Senior Vice President, Proxima about the new standards and how the construction industry can work with public sector to help provide better outcomes for projects.

What are these new policies hoping to achieve?

The hope is that the policy will drive several different outcomes including the best possible use of public money and driving consistency across major government projects.

All new frameworks will have to meet the new standard and all existing are expected to develop plans for improvement in line with the updates.

This will likely have a significant impact on those who have settled on a multi-year framework. Industries will now be expected to meet the new standard which will have a knock-on impact on profitability.

The new framework is designed to push cost back to subcontractors for better deliverables. From a government perspective, it is about achieving better value and outcomes which look beyond cost.

How are main contractors implementing these changes? How are the changes affecting the smaller subcontractors and supply chain – will they be able to adopt these changes easily?

There are a total of twenty-four recommendations in the new Gold Standard, some of which will be more straightforward than others to implement.

ESG is high on the agenda but for smaller businesses this will be more challenging. Long term there may be benefits for SMEs when adapting their business model to the new framework but taking the long view may be difficult when trying to keep above water, particularly post Covid.

Additionally, the focus covers “lost learning” and the need to avoid building whole new relationships when a new project starts. Again, this will suit the larger players that have more money to invest in the changes but will be challenging for SMEs.

Do you see the changes affecting the private sector?

These changes will have an impact on the private sector which supports these types of projects. It favours the larger players who will devolve into regional players to hit the required targets to support projects but will impact the smaller/regional players as the new standard roles out.

How are the changes helping supply chain visibility and collaboration?

It is too early to tell how this might improve supply chain visibility and collaboration. However, it has the possibility of slowing things down and creating a pressure further along the process. This could then drive a “need to act” mentality where the cost and availability mean more than the value.

The good news is that Proxima can support these changes. We have a well-structured process and the forward visibility required to help businesses secure more business in line with the Gold Standard framework. It would also help with planned spends on materials to offset any increase the new standard will have.

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