The new chairman of the Construction Industry Council says that leaving the EU could be great news for most UK construction companies.
If it means an end to tendering projects through the Official Journal of the European Union (OJEU), he said, bid costs will come down and smaller and medium sized firms will get a much better look in.
John Nolan was yesterday inaugurated as the new chairman of the Construction Industry Council (CLC), which is the umbrella body for 50 professional bodies. He takes over from Gardiner & Theobald senior partner Tony Burton for a two-year term.
John Nolan is a past president of the Institution of Structural Engineers and a fellow of both IStructE and the Institution of Civil Engineers. He is also a visiting professor at the University of Birmingham.
On taking the chair, he said: “Last week’s referendum result heralds a seismic change in the way our country does business with Europe and the rest of the World and will particularly affect the trading environment of our built environmental professionals. It is my intention to see that their voice is heeded in the negotiations with the EU and subsequent negotiations with our other trading partners throughout the World. We have the opportunity to consign UK OJEU to the dustbin of history with its ridiculously inflated bid costs that squeeze out the SMEs and it’s massive deleterious effect on the cost and quality of public sector projects.”
John Nolan started his career as a labourer and progressed to become one of the founders of two #engineering consultancies, one of which, Nolan Associates, he still chairs. He is also one of the founders and chairman of a property development company and is a non-executive director of a power company.
Tony Burton described his successor as “a deep thinking and very capable individual.”
However, at least one person thinks John Nolan is wrong. Alan Heron, head of procurement at Procurement Hub, told a Chartered Institute of Housing conference that tendering rules may not change as much as some might be expecting. “Rules associated with the Official Journal of the European Union will go, but they will be replaced with something very similar as they’re based on good practice, and that will be the same for everything else. There will be some framework tweaks, but we expect limited change,” he said. ““We already have an example of what these new rules outside of the EU will look like. The government procurement agreement applies to countries inside the EU who also use the OJEU process, and those outside such as the US and China, and the GPA rules are pretty much the same.”
Meanwhile, one economist has significantly revised his expectations for the performance of the UK construction industry as a result of the Leave vote. Danny Richards of the Construction Intelligence Center has changed his forecast for growth in the UK’s construction industry from 3.4% and 4.0% for 2016 and 2017 respectively to 2.8% for this year and just 1.5% next year.