The Value Added Spending Monitor – November 2014

The Value Added Spending Monitor tracks the financial challenges facing local authorities (LAs) in carrying out built environment projects to maintain and improve public service delivery.

• Urban areas hardest hit by built environment budget cuts
  Falling budgets for built environment projects have impacted urban LAs the most during 2014. Average urban revenue budgets were down -15% compared with -13% in rural areas. The difference was even greater in capital spending: down -10% in urban areas compared with -4% in rural areas.

• …but rural areas are experiencing the most rising pressure on construction spend
  Almost four in five LAs (79%) are having to adopt a more business-like or commercial approach to delivering public services. Those in rural areas are the most affected. They are also the most pressured to reduce costs, increase local spend and demonstrate value for money in their procurement policies.

• Two thirds find it is getting significantly harder to achieve quantity and quality
  More than nine in ten LAs (91%) feel the challenge of delivering project volumes and quality services is getting harder – including 67% who believe the challenge is getting significantly harder.

• Suppliers’ inability to deliver within budget is the most common barrier to success
  In the last two years, 73% of LAs have had to cancel or postpone a planned built environment project, with the most common cause being suppliers’ inability to work within their available budget.

• Lack of confidence exists over hitting savings targets and adding value to projects
  More than three quarters (77%) lack confidence in hitting 2015 savings targets for built environment projects. Providing more learning opportunities is their top priority for adding value (79%) along with increasing local spend (74%) and employment (74%).