Monday, 5 January 2009

Gordon's 100,000 lies

Let's look at Gordon's latest promise of bringing forward £10bn of public sector projects and 'creating' 100,000 jobs. First, the bigger the projects, the longer the lead times. Big infrastructure projects need years of planning, planning enquiries, and often involve land acquisition and assembly, legal appeals, huge design and project teams, extensive site investigation and so on. So little chance of getting big projects to deliver on site within three years, by which time the worst of the slump is forecast to be over.

OK, so take a smallish project - say £10m. Say a new ward block for a hospital, or a VIth form block for a school. Delivered by a public authority and built on land it already owns. And let's say the project idea was approved and the cash allocated on 1st January 2009. Here's how it might happen.

1. Mid February
- Project team decide on traditional build rather than modular build; using the Treasury's Green Book options appraisal methods, this provides the optimum return given the economic life of the alternatives.
2. Start of July 2009
- Architect appointed. Writing and getting approvals for the design brief has taken 8 weeks, and as the fee will exceed the EU threshold for public procurement, they have had to spend 13 weeks advertising the job in OJEU and in internal procedures in appointing the designer.
3. September 2009
- Sketch designs, layouts and building performance criteria agreed. Design team proceed to detailed design.
4. January 2010
- Detailed design completed, planning consents (8 weeks) applied for
5. March 2010
- Production information and tender documents completed. Must go through EU tender procedures as exceeds construction threshold, so in
6. June 2010
- Contractor appointed. Contractor needs 6 weeks to mobilise, so work starts on site in
7. August 2010 - Groundbreaking ceremony; Chair of Health Trust presented with silver plated spade.
8. The contract is worth £8m; the rest of the £10m budget is contingency and design team fees. The contract period is 50 weeks.

9 - October 2011
- Building completed. Delays due to specified window manufacturer having gone bust, poor weather, unknown obstructions in ground.

So, apart from the design team, the temporary construction jobs that will have been bought will have lasted for about a year from Autumn 2010 to Autumn 2011. The permanent jobs that could come out of the new facility - nurses or teachers, cleaners, a few extra managers - won't come on stream until the start of 2012. By this time the IMF will have imposed swingeing cuts on UK public sector expenditure, so it's likely the new facility can not actually afford to open.

So who will benefit? Well, desi
gn firms, quantity surveyors, structural and M&E engineers and the like, if they can hold on until mid 2009 when appointments are made. And by how much will economists reduce their forecast of the unemployment totals for 2009 / 2010? Nil. Nada. Nothing. Zero.

1 comment:

The Great Simpleton said...

Who will benefit?

Bureacrats who cannot be sacked in an effort to save money as they are now managing a project that wasn't neccessary and won't bring any real benefits for 2 to 3 years.