Jeremy Hunt has slowly been dismantling Kwasi Kwarteng’s mini budget that was announced just a number of weeks ago under the leadership of Liz Truss that put the UK economy into something of a spin.
All of us as individuals and the businesses to which we belong felt the implications and there is no doubt that we will all feel the impact of the forthcoming announcement on 17 November. I chaired a session at the Highways UK event last week with a couple of superb panellist in Andy Gutherson, Director of Place at Lincolnshire County Council and the Director of Supply Chain at National Highways, Dave O’Neil.
The topic of discussion was ‘what a modern resilient supply chain should look like in these challenging times’ and there was a lot for us to consider as a result of the impact of the war in Ukraine, the growing climate crisis and the problems exacerbated by the mini budget. As our own costs of living increases with energy and food, so does the base cost of certain products and materials widely used in highway construction.
It was encouraging to hear the views of Andy and Dave about steps that can be taken to address this, but there was also a worrying backdrop that some clients are aiming to deliver the same percentage reduction in works next year comparable to the rate increases. What we need from clients in these challenging times is a different approach, perhaps by asking their supply chains to offer advice around varying standards and alternative approaches that could dramatically increase the throughput of work next year – never has the need been greater to demonstrate agility and ingenuity.
To support our supply chains we explored what a community contracting model might look like as this particular mechanism was of interest to both Local Government and National Highways.
There was sense that our supply chains should be empowered, not controlled; they should be allowed to influence the solution, not be told what to do; and they should work together as a community, alongside the client, with no boundaries which had previously been built on the basis of competition. Whilst we all recognised there was much more that needed to be done here, both Lincolnshire and National Highways had made some progress.
The 17th November will herald more change and our only option will be to react positively and deal with the emerging priorities as dictated by Central Government. Those who are agile, will do a better job.