{"id":4176,"date":"2022-10-04T12:17:43","date_gmt":"2022-10-04T11:17:43","guid":{"rendered":"https:\/\/blogs.gov.scot\/public-procurement\/?p=4176"},"modified":"2022-10-04T13:45:44","modified_gmt":"2022-10-04T12:45:44","slug":"addressing-rising-construction-costs-in-scotland","status":"publish","type":"post","link":"https:\/\/blogs.gov.scot\/public-procurement\/2022\/10\/04\/addressing-rising-construction-costs-in-scotland\/","title":{"rendered":"Addressing Rising Construction Costs in Scotland"},"content":{"rendered":"

We welcome a blog from our Property and Construction Division on addressing the rising construction costs in Scotland.<\/h3>\n

The Scottish Government recognises the significant pressures currently faced by the construction industry due to the dramatic rise in the cost of fuel and materials, inflation, and stretched public budgets. These pressures, coming on top of the continued impact from COVID-19, material supply issues and wider economic climate changes, are significantly impacting both public client bodies and members of the construction industry.<\/p>\n

We are working closely with the construction sector, through the Construction Leadership Forum<\/a> and other industry discussions to understand the impacts that this challenging time is having on the industry, on both large and small organisations.<\/p>\n

In order to help address and mitigate these challenges, Scottish Government have a number of guidance measures that public sector bodies should be aware of when procuring and managing their construction projects.<\/p>\n

Advice has been issued through CPN 3\/2021<\/a> to contracting authorities on how to manage and mitigate market pressures affecting the availability and affordability of construction sector resources.\u00a0 This advice covers existing contracts, but also advises on managing the design, procurement and delivery of forward construction portfolio programmes.<\/p>\n

The Scottish Government recognises the significant pressures that can be caused by delayed payments in the construction industry, especially on sub-contractors and further down the supply chain. The Scottish Government have addressed this by providing guidance for wider public sector contracts encouraging prompt payment, the use of Project Bank Accounts, and consideration of the past payment performance of those bidding for public sector contracts. The Scottish Government is committed to paying our contractors promptly, targeting to pay valid invoices within 10 days of receipt, going beyond our contractual commitment to pay within 30 days. Further advice on contract payment terms is included in Construction Policy Note 9\/2020<\/a>.<\/p>\n

To ensure that payments are made directly and simultaneously from public sector clients to members of a construction contract supply chain, bodies subject to the Scottish Public Finance Manual must include\u00a0Project Bank Accounts\u00a0in tender documents for contracts over the applicable value thresholds. The Scottish Government Project Bank Accounts Guidance<\/a> defines these as \u00a32M for building projects and \u00a35M for civil engineering projects.<\/p>\n

Although costs are increasing, it remains important the public sector actively seek to identify abnormally low tenders to encourage sustainable prices and successful delivery of projects and services.\u00a0 Construction Policy Note 1\/2021<\/a> reminds the public sector clients of their responsibilities in handling abnormally low tenders\u00a0and highlights the importance of bidders putting in realistic and sustainable bids.<\/p>\n

Whilst Local Authorities, or other bodies not governed by the Scottish Public Finance Manual, are not under obligation to take or follow Scottish Government advice, they are strongly encouraged to carefully review Scottish Government guidance and apply it where appropriate.<\/p>\n

We will continue to liaise with both public sector bodies and construction industry representatives and continue our ongoing work with the Construction Leadership Forum to support the sector in managing the current sector challenges.<\/p>\n

Please forward any enquiries to PropertyandConstruction@gov.scot<\/a><\/p>\n

\n

For further information on public procurement in Scotland please visit\u00a0www.gov.scot\/procurement<\/a><\/p>\n

Please email enquiries to\u00a0scottishprocurement@gov.scot<\/a><\/p>\n

Follow us online:<\/strong><\/p>\n

\"Follow<\/a>\u00a0\u00a0 \u00a0\u00a0\"Follow<\/a>\u00a0 \u00a0 \u00a0\"Follow<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

We welcome a blog from our Property and Construction Division on addressing the rising construction costs in Scotland.<\/p>\n","protected":false},"author":634,"featured_media":4177,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[123,10,124],"tags":[315,649,476],"class_list":["post-4176","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-construction","category-procurement-news","category-property","tag-construction","tag-costs","tag-property"],"yoast_head":"\nAddressing Rising Construction Costs in Scotland - Public Procurement and Property<\/title>\n<meta name=\"description\" content=\"We welcome a blog from our Property and Construction Division on addressing the rising construction costs in Scotland.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.gov.scot\/public-procurement\/2022\/10\/04\/addressing-rising-construction-costs-in-scotland\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Addressing Rising Construction Costs in Scotland - 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