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Oxygen Finance

The RAAC Crisis: How The Public Sector Is Ramping Up Remedial Action

The RAAC crisis has rocked the Buildings sector, with increased remedial action as affected public sector organisations rightly respond. Oxygen’s Jon Pugh examines the problem and how Oxygen Insights’ pre-procurement intelligence reveals how the public sector is tackling the issue head-on.

Every Monday evening for the past nine months, I have been taking my son to swimming lessons at our local leisure centre. He was anxious at first; a bit worried about the water and getting his head wet, but with the support and guidance of a brilliant instructor, he can now swim and looks forward to his weekly pool sessions. However, we have not been able to attend these lessons since Christmas after Reinforced Autoclaved Aerated Concrete (RAAC) was discovered at the leisure facility; this has seen his swimming sessions cancelled while this is dealt with. A national problem in the construction industry has now had a personal local effect on us.

And it appears that we are not alone – although concerns regarding the use of RAAC have been around for decades, the issue rose to public prominence in summer 2023 when a structural panel collapsed at a school in England. Although no one was injured, this incident has highlighted the potential risks of the substance and has since seen UK public sector organisations scramble to review the structural integrity of their buildings.

As recently as February 2024, the Department for Education published an updated list of 234 schools/colleges in England that have RAAC, and of this total, 119 will need to have one or more buildings rebuilt or refurbished through the School Rebuilding Programme.

This is where Oxygen Finance’s Insights Portal proves useful, notably the Pre-Procurement module which provides early intelligence regarding potential building consultancy, refurbishment and maintenance projects in the public sector.

 

How councils are responding to RAAC

One potential RAAC issue highlighted by Insights pre-procurement intelligence is a £20m project to deliver “a programme of essential repairs and improvements” at Medway Council’s Gun Wharf Headquarters. This followed the discovery of RAAC planks in the roof of the building, and the authority agreed to proceed with the Gun Wharf investment option at a Cabinet meeting in February 2024.

A second unitary council in the southeast of England, Thurrock Council, has also identified issues with RAAC, this time at five schools under its remit – St Cleres, East Tilbury, Arthur Bulger, Thameside and Ortu Corringham – while Uttlesford Borough Council, located in Essex, discovered RAAC in the ceiling of the Lord Butler Leisure Centre. This concern was identified in February 2023 and areas of the facility were subsequently cordoned off while repairs were carried out. The financial impact of the RAAC and the part-closure of the centre totalled circa £164.5k.

 

RAAC prompting hospital rebuilds

While it appears that most issues surrounding RAAC have affected local authority buildings, the NHS estate has also been affected by crumbling lightweight concrete. The James Paget University Hospitals NHS Foundation Trust committed to a complete rebuild of its hospital, partly due to the presence of RAAC, in 2023 as part of the wider £20bn New Hospitals Programme.

A similar problem has arisen at The Queen Elizabeth Hospital, Kings Lynn NHS FT, leading to the development of a RAAC business case seeking investment of £80m over a three-year period to rectify the hospital’s structural issues. Further problems with RAAC have been identified at the West Suffolk Hospitals NHS Trust, and NHP monies will be committed to fund the development of a brand-new hospital.

 

The scale of the public sector’s investment into property projects

Oxygen Insights’ spend intelligence highlights how the wider property works market (specifically ‘Property Maintenance’ and ‘Property Consultancy’ projects) saw local government and NHS organisations spend a total of £7.31bn during the financial year 2022/23.

 

 

Although only part pf this spend will be attributable to combatting RAAC, the issue will clearly be one of the drivers of spend in the category, and the income of the some of the top ten suppliers listed below.

 

 

For clarity, Oxygen Insights’ Pre-Procurement team scours local authority and NHS documents to find public sector pre-tender opportunities, before alerting potential suppliers to these, giving them pre-procurement intelligence and information, before the project becomes more widely known.

By way of contrast, Oxygen’s Spend tool draws from over 200 million invoices from almost two million suppliers, across more than 1,000 public sector organisations. The Insights Spend team cleanse, categorise and enrich data from around 1.7 million invoices, the aggregate of which is then used by contractors/bidders to spot potential contract opportunities, and by buyers to set their procurement strategies and make better decisions.

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