Chief Treasury secretary Alan Milburn last week unveiled the Treasury's Achieving Excellence action plan, which sets out annual targets for improvement by 2002.
By that time, all government departments are expected to have met the taskforce goals of a 10% annual reduction in costs and build times. The government is also looking for a 20% annual reduction in defects and a 20% increase in completion and cost reliability. In return, contractors are expected to improve annual profitability 10% and cut the accident rate by the same amount.
Milburn stressed that the plan was not just a Treasury initiative but a Whitehall-wide commitment to change.
He said: "We realise the industry has had more than enough of warm words. For the first time, we are setting concrete targets against which the government will be judged. If you like, the government is deliberately putting itself under the spotlight and we are determined to drive change." He said the action plan put the industry in a "win-win" situation.
He said: "It means the taxpayer gets better value for money and the industry gets a better client to deal with." The government recognised that, as a big client, it had a major role to play in improving the industry, Milburn said. "There is little chance of the industry improving if the government doesn't help." Details of how the targets will be enforced are sketchy. Milburn said departments would be encouraged to deliver the goods but those that failed would not be "bullied".
Mike Burt, head of procurement practice at the Treasury, said the action plan amounted to a hard-edged implementation of much-discussed reforms.
He said: "The idea is to send strong messages to the rest of government that we have set targets and we mean to meet them." Burt said government departments would be encouraged to take more risks with the way they procure construction.
The Treasury has been in talks with public spending watchdog the National Audit Office to make sure that civil servants are not penalised for taking risks.
Burt said: "The NAO is interested and supportive. It has said it is prepared to acknowledge and support innovation where that creates better value for money. It is prepared to look at this in a new light."
