More than 40 per cent of respondents in a new construction sector survey believe changes to procurement law next week will not deliver value for money on public projects.
The report, undertaken by multidisciplinary consultancy Pick Everard, surveyed attitudes ahead of the 2023 Procurement Act’s implementation on 24 February.
Among the main aims of the legislation is to deliver a simpler, more flexible and more transparent system for public procurement that considers taxpayers’ money.
Assessing this objective, contractors were among the most positive of respondents, with 66 per cent believing the new legislation will result in greater transparency.
However, only 58 per cent of respondents overall believed the Procurement Act would deliver value for money, whereas 42 per cent thought it would not.
And a third of contractor, developer, consultant and client firms surveyed said they were unaware of the impending changes to public sector procurement.
Asked what the biggest outcomes of the new act will be, 48 per cent said “fairness and transparency” – ahead of “improved dialogue and negotiation procedures” at 42 per cent.
Most of the respondents (52 per cent) in the Pick Everard survey said that the new legislation will offer a fairer playing field for SMEs to compete via more accessible tendering.
A majority (61 per cent) said that the Procurement Act would improve the transparency of procurement processes through a new digital platform.
The survey also gauged construction industry sentiment on current market conditions.
More respondents were pessimistic than optimistic about whether they can attain their business objectives this year (25 per cent versus 22 per cent).
A majority (53 per cent) said they expected construction costs to rise by 3-5 per cent or more. Higher material costs (29 per cent), tax increases (25 per cent) and the impact of government policy (17 per cent) were among the challenges cited by respondents.
Gavin Mason, operations director at Pick Everard, said: “The industry is still cautiously predicting cost rises but some of the bottlenecks we are witnessing through planning and particularly the Building Safety Regulator are significant.”
He said that high-risk building schemes “are being choked, and the construction supply chain is getting starved of work, leading to significant potential for price reductions as the industry competes to keep teams occupied”.
The results of the latest survey still suggest a more positive mood since Pick Everard tested market sentiment last October.
At the time, 74 per cent of respondents stated that gloomy rhetoric ahead of the Budget had increased market uncertainty. The same percentage said that the change in government last July had not increased the construction industry’s appetite to hike investment.
