Challenge amid change

A lot has changed in the world since I wrote my last monthly blog – certainly too much to cover in this post. However, amid the death of Britain’s longest reigning monarch, military progress in Ukraine and party conference season, it is the government’s recent fiscal event and the now divergent approach to public spending across the British nations that has resonated most.

Indeed, Kwasi Kwarteng’s mini-budget and the increased borrowing of the new administration in Westminster struck a significantly different tone to deputy first minister for Scotland, John Swinney’s update to Scottish Parliament two weeks earlier. He had outlined plans to cut public spending by ￡500m.

The update regarding Scotland’s public purse – which, due to inflation, is now worth ￡1.7bn less than it was at the start of this year – was of particular interest as it came in the days after I opened SCAPE Scotland’s latest Economic Forum.

The event was an opportunity to welcome our partners and a range of civic leaders to Edinburgh to discuss some of the collective challenges and opportunities the public sector construction faces in Scotland. Unsurprisingly, funding was a key focus – particularly in relation to levelling up and the journey to net zero.

Speaking to our partners and clients in Scotland, there is a collective sense that more could be done to support the nation in levelling up – particularly outside of major economic hubs like Edinburgh. As we well know, investment in sustainable community regeneration will be a key driver if local authorities in Scotland are to achieve the economic growth that both Whitehall and Holyrood desire.

Funding is not a catch all though and it was pleasing to hear clients and contractors alike recognising the importance of collaboration between public and private sectors to make the most of central funding and ensure every project has a positive social impact that maximises community benefits.?

Listening to our speakers, it was inspiring to hear about the range of projects already adopting this approach and the social value being generated as a result. That said, they also reaffirmed that there remains a long way to go before the sector’s approach to construction is anywhere close to uniformity – particularly as many local authorities deal with the effects of inflation while continuing to experience increased demand for their services post-Covid.

The impact of these pressures was most apparent in our panels’ discussions regarding the road to net zero. Most local authorities have declared a climate emergency, but the industry’s view is that too few have had the bandwidth to shift their focus and financial strategy to implement meaningful action.

In my mind, this is where the construction industry and procurement have a key role to play. Local authorities want contractors to share best practice as well as to learn from the experiences of other public sector bodies. As well as addressing the cost pressures we’re seeing our clients experience – 99% of our projects are delivered on time and on budget – our frameworks provide the opportunity to work with delivery partners who we believe are the best in the industry when it comes to the priorities of our time – social value and net zero. I know that procurement is not sexy but I truly believe that smarter procurement can be the silver bullet for the challenges we face.

The SCAPE Scotland Economic Forum was a great reminder of the public sector’s ability to share best practice without the need to preserve competitive advantage. I’m looking forward to seeing the influence it has had as I visit more sites in Scotland over the coming months.?