55 We followed up survey responses to obtain more details about price increases (Figure 11 overleaf). Public sector and third party initiated changes were confirmed as the largest contributing factors to price increases, being the sole reason for price increases in 72 per cent of these projects. The changes ranged from improving design functionality and adding a helipad to a hospital, to changing fixtures and fittings in a school because of a curriculum change. For some of these changes there is limited evidence as to why they were not included in the original specification. Others, however, appear unavoidable due to changing circumstances.
56 There were no projects that experienced price changes originating from the private sector alone. This finding is in line with the 2003 report.
57 This work also identified that risks retained by the public sector, such as discovery of asbestos, drove price as well as time overruns, which is to be expected. Finally, claims by the private sector affected a minority of projects in this population. Claims were said to be in regards to project delays in works for which the public sector held the risk for, and interpretation of, the contract.
Figure 11 | ||
Detailed reasons for construction price changes | ||
Important factors contributing to price increases | Risk ownership | Percentage of projects over price % |
Public sector and third party changes | Public | 72 |
Public sector changes and asbestos | Public | 6 |
Asbestos | Public | 6 |
Claims by the private sector | Shared | 6 |
Public sector, third party and private sector changes | Shared | 3 |
Public sector and private sector changes, and a claim by the private sector | Shared | 3 |
Don't know | n/a | 4 |
|
| 100 |
Source: National Audit Office | ||
NOTE | ||
1 Statistics are based on 32 respondents. | ||