Policy paper

Construction costs: departmental reductions 2014-2015

Departmental construction cost benchmarking data, including benchmarks, predicted speed of cost reductions and cost reductions achieved.

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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 May 2015. This data, which compares costs against a 2009/10 baseline, shows savings of £72 million in 2011/12, £447 million in 2012/13, £840 million in 2013/14 and concludes with £855 million in 2014/15.

The latest 2015 data set shows that cost reductions were still achieved despite a rising market. It gives a level of comparison data to assist further debate between industry and government to secure a sustainable value for money cost position. By publishing this data the government continues to 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 value of cost benchmarking and cost reduction plans to drive and incentivise higher levels of integration in team working to deliver 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 will fall over time, and costs will increasingly cluster at the lower end of the range of costs currently paid for similar products.

Published 9 October 2015