Secretary of State for Levelling Up, Housing and Communities Michael Gove is getting tough on construction companies four-and-a-half years after the Grenfell Tower tragedy.
Gove has turned his ire on Rydon Homes and blocked them from the government’s Help to Buy home ownership scheme with immediate effect.
It means they no longer have government support and cannot market their properties to first time buyers, with the offer of government backed loans.
He thundered: “It is in the public interest to exclude Rydon Homes from the Help to Buy scheme with immediate effect given the extremely concerning evidence heard by the Grenfell Tower Inquiry about its sister company.
“The development and construction industry should be in no doubt: I will continue to go after those who put lives at risk, are responsible for the building safety crisis and are failing to play their part in fixing it. The Grenfell community and innocent leaseholders deserve better.”
Rydon was the main contractor on the refurbishment of the Grenfell Tower which was destroyed by fire in June 2017 with the loss of 72 lives.
Gove has also warned the construction industry “there will be consequences for those who are responsible for the building safety crisis and those who are failing to help fix it.”
A government statement on the ongoing Grenfell inquiry said: “The Grenfell Tower Inquiry is considering worrying evidence of potentially unacceptable practices by Rydon Maintenance Ltd – the lead contractor for the refurbishment of the Grenfell Tower – before the tragedy that occurred in 2017, in which 72 people lost their lives.
“Rydon Maintenance falls under the same parent company as Rydon Homes Ltd and has directors in common.”
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An independent Cabinet Office review into the proliferation and use of frameworks in construction has called for a complete overhaul of the system to end wasted time and costs for bidders.
The review conducted by a top construction legal expert reveals contractors on average are spending nearly £250,000, and some as much as £1m, on individual framework bids.
It concluded that significant cost and time is being wasted bidding for multiple, speculative construction frameworks, often not connected to specific pipelines of work.
Professor David Mosey Centre of Construction Law, King’s College London also sets out terms for a new ‘Gold Standard’ for frameworks and framework contracts.
His report published by the Government said this would drive the strategic actions needed to improve value and safety, manage risks, meet Net Zero Carbon targets and support a profitable construction industry.
Mosey scrutinised public sector construction frameworks with a combined value of £180bn and considered more than 120 written submissions and 50 interviews.
His analysis found evidence of waste, confusion and duplication in processes as well as too strong a focus on achieving the lowest price, rather than best value.
He said: “Review participants report average bid costs for each major framework of over £247,000 for contractors and over £130,000 for consultants, with a maximum of up to £1m in each case.”
On average one in four bids by contractors were successful in securing work, meaning that up to £4m would have be recovered before a supplier delivered any value at all.
“These costs, and the procurement costs incurred by clients, will be substantially reduced if government and industry clarify the scope of each framework and if they adopt a new Gold Standard for selection questionnaires, evaluation criteria, framework contracts, outcome-based performance measures and incentives,” he said.
The new ‘Gold Standard’ for frameworks and framework contracts drives the strategic actions that will improve value and safety, manage risks, meet Net Zero Carbon targets and support a profitable construction industry.
He said that employing the Gold Standard principals offered a dynamic and strategic medium for implementing Construction Playbook policies in ways that break the cycle of lost learning and deliver faster, better, greener construction.
To tackle these issues, the Gold Standard puts in place 24 recommendations, which must be met by both developers and the public sector.
Cabinet Office Minister, Lord Agnew, said: “The new Gold Standard will make sure that vital public sector developments have rigorous measures in place to make sure public money is spent well and that projects are delivered successfully.
“This will be welcomed across the public sector, the construction industry and by the public, who have a right to expect the best possible public sector projects.”
Director of Operations for the Civil Engineering Contractors Association Marie-Claude Hemming said: “We are delighted that Professor Mosey has taken on many of our members’ recommendations in his review, which will enable future frameworks to be established that will deliver improved value for money, efficiency, safety, and social value.
“Moreover, he recommends that future frameworks must focus on net zero carbon and whole life value, delivering both better environmental outcomes and value for money for our members’ clients.
The review is a result of the Construction Playbook, which was launched by the Cabinet Office in 2020 with the aim of making sure the public sector and construction industry work together better to deliver key infrastructure projects.
Click here for the ‘Constructing the Gold Standard report’.
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