Updated: Updated with July 2013 data
The government has been publishing cost data since 2012 in order to understand the cost of government construction and to drive down costs, to deliver 15-20% savings by the end of this parliament. This data, which compares costs to 2009/10 levels, shows savings of £72 million in 2011/12 and a further £447 million of savings in 2012/13. The latest July 2013 data set shows that costs are continuing to go down, and it gives a level of comparison data which will assist a greater debate between industry and government as we work towards securing a sustainable low cost position. By publishing this data we will drive transparency, collaboration and challenge across public and private sector construction clients, with central government taking the lead.
The experience of leading clients in other sectors shows the availability of cost benchmarking and cost reduction plans to be essential to incentivise higher levels of integrated team working, continuous improvement and effective innovation. This in turn enables increasingly challenging cost envelopes to be set for future projects, as innovative construction firms rise to the challenge to “beat the benchmark”. Benchmarks themselves will fall over time and costs will increasingly cluster at the lower end of the range of costs currently paid for similar products.
Construction Cost Benchmarks & Cost Reduction Trajectories: This document publishes departmental construction cost benchmarks (£/m2, £/km, etc); the corresponding cost reduction trajectories (ie the speed with which cost reduction will be achieved) and the actual cost reductions achieved during 2011/12 and 2012/13.
Taken together this information shows the range of costs currently paid for departmental construction projects and the plans departments are developing to reduce those costs, while providing further evidence that the Government Construction Strategy’s overarching target - to achieve a sustainable reduction in the cost of construction by 15-20% by the end of this parliament - is practicable.
Cost Benchmarking Principles and Expectations: This document sets out the expectations in terms of departmental cost benchmarking practice and how maintaining standards in this area helps to reduce costs by informing procurement decisions and increasing the ability of departments to compare data. Moving forward, these principles will be used as the basis for developing consistent departmental approaches to construction related cost benchmarking, some of which are already relatively mature. Application of these principles enables departments to publish their cost benchmark data and supports the new procurement models being trialled as part of the delivery of the Government Construction Strategy.
Cost Reduction Validation Method / Cost Reductions May 2010 to September 2011: An important aspect of the Government Construction Strategy is measuring the progress being made in reducing the costs of construction. This document sets out the key principles that will be applied across Government in measuring from April 2012 the progress made in implementing the Strategy by drawing on the published cost benchmarks to track progress against the departmental cost reduction trajectories. It also reports the overarching cost reductions achieved during the period May 2010 to September 2011, which have been assessed using department-specific evaluation methods.
Cost Benchmarking Principles and Expectations - Departmental Progress Update: This document reports for the first time on the progress being made by departments in implementing the cost benchmarking principles described above. In terms of driving forward further progress, the report identifies specific actions to be addressed both by individual departments and collectively. Key areas for further work relate to sharing and comparing data between departments, the supply chain and private clients.