North East construction firms may get chance of state work

North East construction firms calling for a shake-up of public sector procurement may be on their way to early victory

North East construction sector
North East construction sector

The region’s three largest independent contractors – Newcastle’s Surgo Construction, County Durham’s Esh Group and Gateshead’s Tolent – recently joined forces to highlight how frameworks used by the likes of councils and education authorities can favour large national companies over smaller regional ones, giving the taxpayer a bad deal.

But now, the Education Funding Agency (EFA) has revealed it will establish a regional framework for small works up to £5m, helping level the playing field for firms that may have lower turnover, but plenty of skills and experience.

The change could be of great benefit to companies such as Surgo, Esh and Tolent as it could mean freeing up a good deal of work currently procured through systems such as the £1.25bn Scape national major works framework.

Tolent chairman John Wood, however, is reserving judgment.

“I couldn’t be sure until I saw what the pre-qualification questionnaire was like,” he said. “Let’s hope that the issues we have raised are being properly considered now, but let’s see the documentation before we decide what our response will be.”

The three, who have written to all North MPs and Government ministers about the issue, decided to call for change after they found themselves excluded from the Government’s Building Priority Schools programme, despite forming a consortium among themselves with a collective turnover of more than £250m.

They have criticised the frameworks’ requirements for huge turnovers, the fact a lot of money made in the North disappears from the region when national firms are headquartered in the South and how, with Scape, only a single contractor, Willmott Dixon, has been selected for the third time in a row for all major works. Surgo chairman Ian Walker said of the EFA’s plans: “This looks like a step in the right direction, but it’s a little bit surprising to me, as when we have written to the Government in the past we have always drawn a blank – like what they’re using now is what they’re going to use, end of. So, this is refreshing.

“My only concern is that I cannot see how they can stop the nationals from trying to bid for this framework as well.

“What constitutes a regional business? It’s not, in my mind, when a national contractor just floats in with satellite offices because there’s work in that area.

“It’s one that’s established, that trains in the area and that keeps funds in the area.”

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