05/07/2017

Colin Cram: To prevent another Grenfell Tower, we must centralise public contracts

The tragedy of the Grenfell Tower fire and the problems being highlighted in other tower blocks demonstrate that the traditional model of construction procurement by local authorities and housing associations in England is no longer viable.

Even before the fire, questions were being asked about the relationship between councils, outsourced management organisations and their suppliers. The way local government manages its larger contracts is under particular scrutiny.

Concerns have been raised about the material used to clad Grenfell Tower. Any public inquiry will no doubt consider this and look at the possibility of fraud, as well as budget constraints and contract management at the block.

But the inquiry should also consider whether the traditional model of individual local authorities and housing associations carrying out their own procurement is viable.

Few councils can afford the expertise required for major building and refurbishment projects, and existing processes carry the risk of unhealthy relationships that can facilitate fraud.

– Colin Cram

Clarity is needed on how close the relationships between local government officials and the private sector should be. Corruption is only one of the ways procurement fraud is committed. It is generally accepted that most contracting fraud occurs after contracts are awarded, not before. In both public and private sectors, the management of contracts tends to be under-resourced, presenting some contractors and sub-contractors with opportunities to increase profits or make up for putting in an unrealistically low tender to secure the contract.

This can be done in a number of ways, such as using sub-standard materials or unapproved building techniques. Spotting such practices depends on the team or person managing the contract having enough expertise to recognise what is happening.

Sometimes, contractors persuade contract managers that alternative materials or methods of construction are satisfactory, even where they are inappropriate. In Hong Kong, water pipes in three new blocks of social housing flats had to be replaced two years after they were built, when, it has been reported, a sub-contractor used lead in the plumbing.

I have long argued that major public sector contracts should be let and managed by an expert independent organisation.

There are examples in other countries of how this could work. Singapore’s housing development board is responsible for 80% of the country’s construction and management of homes. The board’s expertise and resources ensures safety in design and construction.

A single, central body to handle construction procurement could provide unrivalled expertise to local authorities.

– Colin Cram

Having a similar UK body could cut costs, enable effective management of the construction industry and ensure it was up to date with the latest innovations. It would be able to work effectively with bodies such as the Building Research Establishment, universities and with industry to test and develop new technologies and better building methods. It could provide unrivalled expertise to local authorities. Pressure to put cost before safety and environmental factors could be resisted. Singapore demonstrates that the drab copycat uniformity of so many UK tower blocks can be avoided.

The government should urgently replace the construction contracting, project and technical teams of housing associations and local authorities with a similar UK body, operating from regional centres.

It could be created by building on organisations such as Scape, which supports public sector bodies to create social value and efficiency in the built environment, as well as bringing together the best local government and housing association teams.

Such an organisation would require strong independent oversight and its use would need to be mandated, while enabling local authorities and housing associations to retain responsibility for commissioning projects.

Colin Cram is a public sector consultant specialising in procurement and the former director of the North West Centre of Excellence.

Colin Cram
Grenfell

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