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 to 2010 levels, shows savings of £72 million in 2011 to 2012 and a further £447 million of savings in 2012 to 2013. 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.