RICS is calling for increased transparency and visibility in government construction contracts to support growth of struggling SMEs.
RICS’ call follows extensive consultation with members from across the sector highlighting the need to unlock construction pipelines, reform procurement processes and improve access and visibility of finance.
RICS’ UK Construction Policy was recently launched and outlines recommended actions for government, industry and RICS itself to address these concerns. These recommendations offer time and cost-effective solutions that, if adopted, will support SMEs over the next 12 months and enable a successful and sustainable construction sector for the future.
Central to RICS’ policy is a call to government to improve access to public sector construction contracts, including infrastructure repair and maintenance, by making them visible to all in the industry. This would bring work to the regions meaning smaller contracts could cascade down to SMEs. To support this, RICS is producing specific guidance to aid government staff working in procurement with understanding the complexities of the construction supply chain, including early discussions with SMEs.
However, RICS believes the Government’s current procurement process is standing in the way of this cascading pipeline due to the high level of resources required in completing them. It is therefore recommending simplified, publicly available Pre-Qualification Questionnaires (PQQs) for use by SMEs as a cornerstone of its policy document. This will be supported by a RICS-developed paper supporting all contracting authorities on retaining quality whilst making 15 - 20 percent savings in procurement, avoiding decisions that are purely based on price or fee.
Industry also identified availability of finance and knowledge of how to access it as key concerns during RICS’ consultation, an issue that will increase if pipelines are unlocked and procurement processes simplified. RICS is therefore recommending that the Department for Business Innovation & Skills (BIS) creates a single portal for SME finance, offering advice on what is available and how to apply. RICS will support the Government by monitoring industry feedback through the RICS Construction Market Survey and reporting these back to government.
Jeremy Blackburn, head of UK policy at RICS, said: “Visible pipelines, complex procurement and access to finance are all major concerns for the industry as a whole and particularly SMEs. These issues are intrinsically linked and it is vital we have an overarching approach to address them. The recommendations outlined in our policy document provide a unified approach for government, industry and RICS that have the potential to provide direct and meaningful support for the industry.
“SMEs account for a significant proportion of the construction sector and 50 percent of RICS members. If we can support these businesses to thrive rather than just survive, it will provide a strong foundation for the industry now and for the future. Quite simply, SMEs are the building blocks of recovery.”
