If you always suspected that builders were a shady lot, the Office of Fair Trading appears to confirm that view with a list of allegations against 112 companies, large and small, who together account for 6 per cent of the industry.

The firms now have 30 days to respond to the OFT's charges although as 37 companies have admitted involvement in the hope of lenient treatment, it looks as though the thrust of the OFT's allegations is largely true.

For the publicly-traded firms caught up in the investigation, the question is whether the fallout will have any impact on their ability to win business in future. There are some concerns in the industry that companies who are accused of cover pricing may be banned from bidding for public sector work going forward.

If that turned out to be the case it could cause difficulties for the construction industry, which is struggling with its lowest level of orders in a decade, according to the latest figures from the Royal Institution of Chartered Surveyors (RICS). Recent statistics from the Department of Business Enterprise and Regulatory Reform also show a dip in orders — two per cent down in the three months to January 2008 compared to the year before.

The huge volume of public sector construction since Labour came to power — upgrading the railways, building new schools, new courts and new hospitals — has been something of a gravy train for construction companies and contractors, large and small alike. The major companies will look to that work to protect them during the current downturn in the commercial property world.

However, with many major construction projects still in the pipeline — not least the £5.2 billion of Olympics-related development — the public sector cannot afford to start banning the major companies from bidding for work. With skill shortages, rising energy and materials costs all adding to the cost of public sector procurement, competition needs to be as open as possible.

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