What the long-term fallout of the Carillion debacle will be is hard to predict, but it has at least shone a spotlight on the Private Finance Initiative (PFI), as well as the associated large, long term contracts that can bring contractors down if they go wrong.
One of adjudication’s major attractions was supposed to be that it would provide a relatively cost effective as well as speedy route to freeing up cash flow logjams arising from disputes.
The Nuclear Decommissioning Authority (NDA) had barely started to recover from the severe mauling it was given in March by the High Court over the Magnox fiasco when along comes another shaming investigation into the same events. If anything the latest scrutiny, from the National Audit Office (NAO), is even more damning about government contract negotiating and management skills than the High Court was.
Taxpayers ultimately foot the bill for public sector spending so it is no surprise that the Taxpayers’ Alliance has responded to widespread concerns with the problems afflicting procurement of large public sector funded schemes with a fairly damning report.
The implications of the Grenfell Tower disaster are obviously going to be felt in construction for years to come, and the inquiries, possible criminal prosecutions and civil actions will be capturing headlines outside the industry for a long time.
The Financial Times held its first Future of Construction Summit in May, a well-attended event at ICE headquarters in Great George Street. The sub-heading was ‘Driving productivity through disruptive innovation and collaboration’, areas where the industry is widely agreed to be lagging.
Construction of what is billed as the world’s most advanced passenger railway and the backbone of the UK’s rail network – the HS2 London to Birmingham line – already looks like being bedevilled by the same lack of attention to procurement processes as other large scale UK projects.
Commercial excellence is to be the ‘new normal’ in public sector procurement, Sir Jeremy Heywood, Cabinet Secretary and Head of the Civil Service, has said in a blog on the civil service website.
Private finance type contracts came under harsh scrutiny by the inquiry into the buildings defects that led to the collapse of a school wall in Edinburgh in April 2016.