21 JUN 2018
In recent quarters, the BIS Tender Price Index of Public Sector Building Non-Housing (PUBSEC) has been producing erratic results.
Although it is based on the same project indices, the calculation method for PUBSEC is different from the BCIS Tender Price Indices (TPI):
The indices are based on a declining sample of projects analysed for 2017. The BCIS Tender Price Index indicates a significant increase in prices of 14% (4Q16-4Q17). Based on a subset of the same data, PUBSEC has risen by 22% over the same period. However, the individual project indices do not indicate there should be such a difference.
It seems that there are insufficient projects to make the PUBSEC calculation method reliably reflect the underlying project indices.
BCIS has produced a new series called 'Extension of PUBSEC Tender Price Index of Public Sector Building Non-Housing' which is a smoothed version of the BCIS All-in TPI for 2017 onwards.
Comparing the original PUBSEC and Extension of PUBSEC indices:
BCIS recommends that the series 'Extension of PUBSEC Tender Price Index of Public Sector Building Non-Housing' is used in place of 'PUBSEC Tender Price Index of Public Sector Building Non-Housing' where the index is written into procedures or contracts. However, users should consider whether the BCIS All-in TPI would be more appropriate in future or for other applications.
At the request of various public-sector organisations, BCIS has calculated and published PUBSEC since it was discontinued by the Department of Business Innovation and Skills (BIS) at the end of 2014.
BCIS is keen to investigate the existing use and needs of public sector bodies and is looking to set up a workshop. Any parties willing to participate can contact Richard Groom.