· 1 min read · News

Widespread corruption in the construction industry, CIOB study finds

Published:

Almost half of construction professionals feel that corruption is commonplace within their industry, according to a survey by the Chartered Institute of Building (CIOB).

The study of more than 700 construction professionals, including 350 senior executives, found 35% said they had been offered a bribe or incentive on at least one occasion.

It showed that cultural practices and economic conditions are the main reasons for corruption. Squeezed tender margins and reduced workloads have pressured some into corrupt practices as a means to survive.

The study showed that, despite the introduction of anti-corruption legislation such as the Bribery Act in 2010, more than a third (38%) of respondents had come across cartel activity in the UK construction industry on at least one occasion, and of those 29% had witnessed it over the past 12 months.

CIOB deputy chief executive Michael Brown said: "Cultural practices and the consequences of the recession have placed a greater strain on companies to sometimes engage in adverse practices as a survival mechanism."

The study found corruption activity included billing for underperformed work, collusion on projects and cover pricing. Around 65% of respondents claimed practices such as the use of gifts and free corporate hospitality to win contracts is widely used.

Limited effect

About half of survey respondents were unaware whether their firm had a whistle-blowing policy, and only 7% said they had used it.

More than half (54%) were unable to estimate the annual cost of fraud or corruption to their organisation. And nearly 10% indicated annual losses totaling £1million or more as a result of fraud and corruption.

The CIOB suggested that measures aimed at tackling corruption, such as the Bribery Act, appear to have had a limited effect, with no prosecutions against businesses taking place.

"If the UK is going to live up to its rhetoric of being touch on corruption, both the Government and industry must do more to show proof of progress," said Brown.

*HR Legal Service is offering a free bribery toolkit worth £99.99. Click here to find out more.