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Construction industry representatives included David Fison, chief executive of Skanska in the UK, and Tim Stone, chairman of the financing group at KPMG. The government has appointed former Carillion chairman and chief executive Sir Neville Simms to head the panel, which will draw up guidelines for public sector procurement managers to ensure they work only with firms that have shown a commitment to sustainability.

The sustainable procurement taskforce, set up by the Department for the Environment, Food and Rural Affairs, has given the panel until next April to develop an action plan for change.

The initiative comes at a pivotal time for contractors, when many are relying on public sector spending to boost turnover, especially as recovery in the commercial market is still slow.

However, some firms have questioned whether the recommendations that the panel is expected to reach will be enforced. For instance, one problem faced by the panel will be whether to give priority to environmentally sound solutions when there are cheaper alternatives.

The guidelines are likely to include calculations on the environmental impact of using certain building materials, energy in construction and transport infrastructure.

Simms said: 鈥淭he taskforce has a unique opportunity to engage with key business sectors in the drive towards more sustainable public procurement. I believe the government has a major role to play in stimulating markets to bring forward sustainable solutions.鈥�

I want our work to lead to major changes in both public and private procurement

Sir Neville Simms, chair of panel

He added that it was up to government departments to take the recommendations of the panel seriously. He said: 鈥淚t is vital that the taskforce delivers not only a plan of action, but also a commitment on the part of those responsible for specification and delivery. I want our work to lead to major changes in both public and private sector procurement.鈥�

Environment secretary Margaret Beckett said: 鈥淭he public sector spends more than 拢125bn a year and I look forward to the taskforce鈥檚 action plan setting out how the public sector can embed sustainable development into procurement.鈥�

Simms was chief executive of Carillion until John McDonough took over in 2001. He will report to Beckett and the chief secretary to the Treasury, who are responsible for the government鈥檚 goal of establishing the UK as a leader in Europe on sustainable procurement by 2009.

It has earmarked four priority areas: sustainable consumption and production; climate change and energy; protecting natural resources, and environmental enhancement and sustainable communities.