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Executive opinion


Challenge and opportunity Now that government spending decisions have been made,


the industry must move forward and grasp any opportunities it can, says ECA group chief executive offi cer Steve Bratt


I


t’s always good to have a clear view of where you’re heading and, while the recently announced programme of government spending cuts doesn’t make the most pleasant reading for our sector, we can now at least review where we are and plan for the future. While the industry was understandably concerned


beforehand about the impact of the government’s comprehensive spending review, the ECA is currently assessing what the record budget reduction programme means for our sector. As suspected, it contained some bad news, such as the negative impact it is likely to have on the development of affordable housing. There were also some shaky messages about the medium-term future of Feed-in Tariffs, when what we need is certainty if we are to encourage investment in this area. The same is true of the Carbon Reduction Commitment Scheme (CRC). Under the spending review, the CRC became a ‘carbon tax’ on major clients, but subsequent protests have led government to announce a ‘fundamental review’. The CRC is still very much on the table, but its precise future is uncertain. However, some announcements were


more welcome, such as the extra money committed to funding adult apprenticeships, and the promise of training support for SMEs.


Hitting targets It is in this area, helping clients to reduce their energy bills, that electrical contractors can really make their mark. Not only does this provide a valuable opportunity at a time when other, more traditional, sources of work are more diffi cult to fi nd, but it also provides a genuine opportunity for them to move up the supply chain. Why is this? Well, we know that the UK government has set challenging


targets for reducing carbon emissions. We also know that around 80 per cent of the buildings that will be in existence when the targets need to be met already exist. Therefore achieving these targets is not about new building, or even about signifi cant changes to building structures. It is, however, about harnessing building engineering services to maximise and intelligently control energy usage. I have recently been attending ECA regional conferences,


and have been talking with members about these kinds of issues. I have to say that I have been very encouraged to


About the author


Steve Bratt Steve Bratt was appointed group chief executive offi cer of the ECA in October 2010. He joined the ECA as chief operating offi cer in 2007, and became deputy CEO in February 2010.


hear that electrical contractors are managing to seize on this opportunity to operate as the main contractor. In these instances, they have managed to convince their clients that it is the services contractors that are critical, and they have also been prepared to manage the construction-based aspects of the projects. They are no doubt encouraged to do so by the better margins that can be achieved in some of these specialist areas, as they are not so prone to some of the undercutting practices prevalent in mainstream electrical contracting. This is a potentially exciting development and one I hope to see adopted by many more contractors.


I have been very encouraged to hear that electrical contractors are managing to seize on this opportunity to operate as the main contractor


Developments Speaking of new developments, it has been great to see the hard work that’s been done in the rationalisation of pre-qualifi cation activity, and the adoption of fair payment practices coming to fruition. In the case of pre- qualifi cation, the government’s Department for Business, Innovation and Skills (BIS) has published PAS 91, which aims to reduce the time and cost of completing pre-qualifi cation processes by establishing common criteria. The Safety Schemes in Procurement


(SSIP) initiative also continues to develop, offering mutual recognition between many of the leading health and safety pre-qualifi cation schemes. As regards fair payment, the Offi ce of Government Commerce


(OGC) has now made it a contractual requirement in new central government contracts that payments down the supply chain must be made by no more than 23 days from the due date in the main contract. These new requirements are also recommended best practice in the wider public sector. In addition, the OGC has recommended that central


government departments, their agencies and non-departmental public bodies should move to a position where project bank accounts are adopted, unless there are compelling reasons not to do so. All of this is very encouraging. Finally, we have recently heard David Cameron promise to


end government’s ‘institutional bias’ against SMEs and initiate a ‘brutally honest’ review into how government can make life better for SMEs. In the wake of Lord Young’s departure as a government adviser, however, it remains to be seen whether it can deliver. We are open-minded and will support any moves that will benefi t small business. Watch this space!


Winter 2010 ECA Today 17


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