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The Rt. Hon. Stephen Timms MP, Former Minister of State for Competitiveness
Royal Overseas League, 19 September 2007
I am delighted to be here this afternoon and to have this opportunity to say a few words on my own behalf, but also on behalf of my Treasury colleague, Angela Eagle, who had also wanted to be here today.
I have also spent some time as a Minister at the Treasury –most recently until June as Chief Secretary – and one lesson I have brought with me from that work is a clear recognition of the vital importance of construction to the UK economy. Construction accounts for over 8% of UK GDP, it employs over 2 million people and it comprises some 275,000 firms. So we are talking about a very significant component of the economy.
But of course construction is more important than that – especially for a Government like this one which has nailed its colours to the mast of improving public services. Evidence from the National Audit Office (NAO), the Commission for Architecture and the Built Environment and others shows that the way schools and hospitals are designed and built affects education and health outcomes. So construction is central to whether we are going to succeed in our ambitions for key public services.
And that’s another reason we want to work with the construction industry to help ensure it reaches its full potential.
We can make a difference through regulation. Today’s event is about fair payment. Our consultation on potential changes to the Construction Act closed on 17 September. We have received 66 responses – which shows this is an important issue to the industry – and we are now busy analysing them. I am committed to introducing changes as soon as Parliamentary time allows.
Over a third of the output of this industry is for the public sector. So, on many issues, Government - the public sector - can make also make a difference through how it does its procurement.
This isn’t straightforward. The public sector construction client function, rather like the construction industry, is very fragmented. So its a big challenge to ensure that the very good best practice guidance, which the Office for Government Commerce has produced, in partnership with the Public Sector Construction Clients Forum – together with Achieving Excellence in Construction and the Common Minimum Standards – are widely adopted. And that is exactly what we must do with this Fair Payment Guide and Charter.
I am pleased to be able to tell you today, that the Public Sector Construction Clients Forum departments have already signed up to the Charter and that they have also agreed for OGC to put in place a regime to measure the improvement between now and 2010. I know that the industry will play its part too, and I warmly welcome the fact that the Charter has been signed by all parts of industry this morning.
I am delighted that industry and Government have been able to come together to agree principles of fair payment which should apply on construction projects. I am grateful to Archie Robertson [Note:- Chair of the WG and Chief Exec of the Highways Agency] and those in industry and Government who contributed to producing this cross industry guidance.
My department has a very clear remit from the Prime Minister to act as a strong voice for Business across Whitehall. We focus on promoting productivity, enterprise, competition, trade and regulatory reform. We lead in Whitehall on the crucial Public Sector Agreement targets for productivity, business success and regional economic performance.
To act as their voice, we will need to engage more effectively with businesses, so that we properly understand the issues that matter most. Where there is danger of an adverse effect on business, we will want to argue industry’s case.
So if you come across an example of a Government Department not following the best practice set out in guidance – be that overarching guidance, such as Achieving Excellence in Construction and Common Minimum Standards, or specific guidance such as that on Fair Payment that we are launching today – let me know, and I will ensure with my colleagues at the Office for Government Commerce that the matter is taken up. We may not succeed every time, but we will give it our best shot.
So my appeal to everyone is that we work together on this. And, if we do, I am absolutely certain we will make a big difference.
Thank you.
