The Prime Minister has outlined his plans to ‘build build build’ and ‘build back better’ during a speech in the West Midlands, intended to help the country – and economy – bounce back as quickly as possible. Gerard Toplass, executive chairman at Pagabo, reacts to the investment promises and discusses how procurement can assist with the delivery on government promises.
The news that GDP for April alone collapsed by 20.4% has been seen by many as a clear sign that the UK is now in recession. COVID-19 and its impacts on numerous industries have been catastrophic in many cases, but with the latest announcements the government has recognised how critical the construction sector will be to our recovery.
However, the COVID-19 response in delivering the NHS Nightingale hospitals within a matter of weeks has highlighted how quickly critical works can be mobilised – something highlighted in the Prime Minister’s speech as he announced the Infrastructure Delivery Task Force – also known as Project Speed. Led by chancellor Rishi Sunak, this taskforce will be responsible for speeding up work on schools, hospitals, road and rail infrastructure.
Among this work, £100m for 29 road projects including bridge repairs in Sandell and the A15 in the Humber region, £10m for development work to ease the bottleneck on Manchester’s railway network to begin this year and £900m for local ‘shovel-ready schemes’ are just a few areas that have been identified. £1.5bn has been set aside for hospital maintenance, hospital building and improving A&E capacity – along with the promise of 40 brand-new hospitals.
The Prime Minister has promised not just to ‘build build build’, but also to ‘build back greener’, with plans for cycleways across the country, committing to planting 75,000 acres of trees each year from 2025 and £40m ringfenced for local conservation projects.
£1bn has also been promised over the next decade for new schools, along with additional funding for repairing existing school and further education facilities, with construction of the first 50 schools to start in September 2021.
The foundations of this work were beginning to be laid earlier in June, when the Housing Minister, Robert Jenrick, addressed a letter to all mayors and LEP chairs around the UK about the ways in which government can support local recovery and laid out a search for these ‘shovel-ready capital projects’ able to be delivered in the next 18 months.
Planning permissions have also been given a break in the light of COVID-19. Permissions usually expire after three years if the work has not been started, but those sites that have an expiry date between the beginning of lockdown and the end of 2020 will be now be granted an extension to April 2021.
This means that developers will not need to submit a new application where permission or content expires during this window, which will reduce costs and time delays for both firms and local planning authorities.
A big drive for all of this is to help keep the construction industry moving – and get it back to its normal productivity levels as soon as possible. It will come as a surprise to no one that construction output dropped by record levels (40 per cent) during April – the height of the lockdown period and a time of confusion on what the lockdown meant for building sites, and what was expected of construction firms.
It was on 13 May that the government gave its first indication of how important it is to ‘keep Britain building’, along with support. From that date sites were able to operate until 9pm Monday to Saturday in residential areas and beyond that in non-residential areas. It was a clear position from the government that planning applications should be approved by local councils unless there were compelling reasons to do so.
It is of course in the government’s interest to ensure that construction programmes plough ahead to meet previous targets and delivery on its election promises to invest £250bn in the UK’s infrastructure. It has estimated that by the end of June, more than 400 residential permissions providing more than 24,000 new homes would have expired – a huge hit to the Conservative party’s promises during the election.
At this time, being able to procure works quickly via a framework will help speed us along the road to recovery in construction. We were really pleased to see government supporting this early on in the pandemic with the COVID-19, PPN 1/20 issued by the Cabinet Office, permitting works, goods or services to be procured urgently by authorities.
We were the only framework provider to waive fees for works being procured using the PPN 1/20, and our frameworks allow for direct award as well as further competition, allowing public sector bodies a fast route to getting shovels in the ground – all ensuring contract compliance and being reassured that delivery teams are secure.
Pagabo has also just announced the details of our newest framework – the first dedicated to developers – which will play a part in the industry’s return to a boom, while also allowing developers the opportunity to secure new work through compliant procurement.
The Cabinet Office released a further procurement policy notice during June – PPN 04/20 – Recovery and transition from covid-19, which extends the relief available to public sector suppliers under PPN 02/20 – supplier relief due to covid-19 until 21 October 2020. This new PPN applies to all contracting authorities across the public sector, which must ‘continue to pay suppliers as quickly as possible on receipt of invoices or in accordance with pre-agreed milestone dates to maintain cashflow and protect jobs.’
This is another area where the use of frameworks can ensure security and speed of procuring works, as frameworks must provide simple, affordable and accessible solutions. Frameworks operate in different ways, but it is important for providers like us to be open and honest about fees. There is no such thing as a rebate free framework, but the way Pagabo charges on a ‘pay as you go’ basis offers clients clarity – and the ability to manage fees through the life cycle of the project.
The government already had ambitious targets for construction prior to COVID-19, so ensuring that the path to recovery is a short one is absolutely crucial in achieving those promises and delivering the necessary infrastructure projects that have also arisen out of the pandemic, such as improving the infrastructure to support digital connectivity and improving transport systems to allow for social distancing.
We strongly believe that the quickest and most efficient way to procure is using a framework agreement — particularly one with a designated Direct Award process. Our frameworks allow for direct award and provide clients with a ready-made, simple and compliant solution, accelerating access to works, goods and services providers.
As a framework provider, we can help government ambition not just with progressing construction works quickly and effectively, but with pace as well.