CBI urges action on retentions in Playbook rollout

The business lobby group has today published a paper calling for an acceleration of the reforms outlined in the 2020 Construction Playbook.

The CBI likes the Construction Playbook – a blueprint for public sector construction procurement – and wants it to be adopted by the private sector as well. However, it wants further amendments to it.

“There is no provision in the Construction Playbook on retentions, and the issue continues to cause problems in both public and private construction,” says the CBI in today’s report. “The government missed an opportunity to reduce client retentions as part of the temporary policy procurement notices (PPNs) introduced in response to Covid-19.”

It continues: “The government should consider prohibiting client and supply chain retentions in future iterations of the Construction Playbook.”

The Construction Leadership Council has a goal to eradicate retentions by 2025 but this is not mentioned in the Playbook.

The CBI paper, called New Foundations, says that construction reform is needed as a precondition to ‘build back better’ and ‘levelling up’, to use the government’s current favourite slogans.

The CBI says that “an accelerated rollout of Playbook rules and enforcement can help ensure the sector remains robust to drive forward the success of UK plc and develop vibrant, prosperous places across the country”.

The Construction Playbook, full title The Construction Playbook: Government guidance on sourcing and contracting public works projects and programmes, sets out 14 policies, including the use of longer term contracts, early supply chain involvement, focusing on desired outcomes rather than input specifications, benchmarking, digital technologies and risk allocation. [See our previous report here.]

Gregor Craig, chair of the CBI Construction Council and chief executive of Skanska UK, said: “The construction industry’s make-or-break role in building the foundations of a net-zero economy by 2050 means we must accelerate our response to the climate imperative. The impacts of the pandemic, new political priorities, and policy developments have created a period of disruption, and this change is the catalyst for permanent transformation in the industry’s business model – but we cannot do it alone.

“New Foundations sets clear priorities for action, from rollout of comprehensive public sector training to implementation of procurement reform and collaboration with industry to manage risk. But success relies on government embedding the reforms detailed in the 2020 Construction Playbook at all levels – from the major departments and arms-length bodies, right through to local authorities.”

CBI chief policy director Matthew Fell said: “A thriving construction industry will be essential to the success of the UK in the coming decades. Not just in hitting net-zero and levelling-up, but in developing a world-class built environment: which is the foundation and the fabric of a modern, globally competitive and sustainable UK economy.

“All of this is achievable and should be the common goal for government and private enterprise. But it is only through financial stability and a secure operating environment that business investment will create the technologies, innovations and skills to drive the transformation needed, at the pace needed.

“The industry’s response to the coronavirus pandemic shows what is possible when a sector pulls together in the same direction. A similar accord between the private sector and government is needed now. If UK construction is to develop strong, new foundations on which to build back better and construct the future the country needs, it must seize this moment to change behaviours once and for all.”

CBI recommendations

1. Public sector contracting authorities must commit to using risk registers and risk allocation matrixes, co-designing these with suppliers to apportion and manage construction risk equitably.
2. As an early priority in the Construction Playbook’s implementation phase, the government must ensure training materials and training delivery are rolled out quickly across the public sector. This could be supported by funding for the Sourcing Programme to deliver training at the upcoming Comprehensive Spending Review.
3. As part of its Transforming Public Procurement programme, Cabinet Office should strengthen its function of identifying and acting on businesses’ reports of poor procurement practices, such as through the Public Procurement Review Service or similar unit.
4. The ‘comply or explain’ regime for mandating the Construction Playbook’s use must be backed up by a mix of ‘carrot and stick’ approaches. This should include explanatory guidance for contracting authorities on different scenarios that do and don’t require compliance with the Construction Playbook.
5. The government should conduct end-to-end construction projects with every phase utilising the Construction Playbook’s guidance. These exemplar projects could be driven forward as part of government’s Project Speed programme.
6. The government should set out a delivery plan for adoption of the Construction Playbook at local authority levels, and develop guidance on how the Playbook should correspond with devolved procurement policies across the UK.
7. The government should provide regular progress updates to the industry, reporting on activities delivered to support the Construction Playbook’s implementation.
8. The government should set out a delivery plan for adoption of the Construction Playbook at local authority levels, and develop guidance on how the Playbook should correspond with devolved procurement policies across the UK.
9. The government should provide regular progress updates to the industry, reporting on activities delivered to support the Construction Playbook’s implementation.
10. Businesses should be prepared to walk away from private sector deals where clients are unwilling to discuss more collaborative and fair procurement processes.
11. Professional advisory firms should prioritise helping clients achieve value-led outcomes from construction projects above seeking ways to keep costs down.
12. The industry should establish a client leadership group that can support the adoption of Construction Playbook behaviours throughout private sector construction.
13. All businesses in the industry should seek to utilise and promote the Value Toolkit among peers, with clients and their supply chains.
14. The Construction Innovation Hub should work with established client leadership groups for the public and private sectors to introduce and embed the Value Toolkit across construction.
15. The government should make sure that future Construction Playbook guidance on ‘value-led procurements’ continues to be in lockstep with the Value Toolkit.
16. Private sector construction clients should actively involve investors in conversations about value and outcomes alongside contractors and suppliers, so that project finance can be more accurately forecast against objectives.
17. The government must ensure that its overarching Net Zero Strategy and related Strategies have consistent and aligned decarbonisation targets, giving confidence to investors and constructors.
18. As it develops sustainability disclosure requirements, the government must ensure businesses can rely on clear consistent sustainability reporting standards, definitions and principles.
19. The government’s reformed planning system must contain mechanisms that will accelerate investment in and delivery of sustainable development.

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