Public Sector (Non-Domestic) Construction Market - UK 2010-2014

Public Sector (Non-Domestic) Construction Market - UK 2010-2014 published by AMA Research in January, 2010. This report price starts from US $ 1150.

Introduction

Abstract

AMA Research have published the 3rd Edition of the report "Public Sector (Non-Residential) Construction Market - UK 2010-2014", which provides a comprehensive review of public sector (non-residential) construction - with a particular focus on the future impact of a slowdown in public sector investment from 2011.

The Government' s commitment to construction programmes within healthcare and education has helped to underpin growth in the market over the past few years; however, it now seems certain that public spending will be cut after the general election in 2010 as a result of the massive escalation in public sector debt. Whilst frontline services such as hospitals, schools and police services have all been safeguarded from cuts by the main political parties, the construction industry remains concerned that any significant cut-backs in capital spending will prolong the construction downturn in the face of continued decline in private sector commercial output.

Key areas in the report:

• Overall review of the UK construction industry with forecasts to 2014.
• Detailed assessment of major sectors within public sector construction including education, healthcare, defence and law and order.
• In-depth analysis of Government funding of public sector areas including education, healthcare and defence.
• Review of Government targets and current progress of construction initiatives and programmes within the education and healthcare sectors.
• Review of the major influences, including future public sector spending levels, public sector debt and sustainability issues.
• Key market trends and impact of economic downturn on the public sector construction market.

Areas of particular interest:

• Public sector accounts for around 40% of all new work in 2009 - compared to around 25% in 2006/07.
• Analysis of future workloads and capital expenditure in major public sector markets in 2010-2014.
• Analysis of Conservative Party policy on education, healthcare, defence and custodial sectors.
• Key drivers of growth in the public sector construction market and forecasts over the next few years.
• Analysis of measures and proposed funding cuts laid out in the 2009 Pre-budget Report.

Some of the major contractors featured include:

Balfour Beatty, BAM Construct, Carillion, Galliford Try, Interserve Project Services, Kier, Laing O' Rourke, Morgan Sindall, Wates, Willmott Dixon.

Key areas covered in the report include:

CONSTRUCTION MARKET OVERVIEW

• Value of construction new work output - trends and forecasts in non-domestic sector from 2008- 14.
• Construction output by sector in 2009 and 2010-2014.
• Public Sector Construction market - output and analysis by sector including healthcare, education, defence and other public sectors. Public sector accounting for around 40% of all new work, compared to around 25% in 2002-07 period.
• Public sector construction new work now valued at almost £13 billion. Outlook for 2010-14.

FUNDING OF PUBLIC SECTOR WORK

• Public Sector Investment - current and forecast public sector investment - split by sector (Education & Health, Defence, Transport etc.)
• Education Output - Government Targets and progress of key education building programmes - BSF, Academies Programme, Primary Capital Programme. Progress to date on major spending programmes, targets up to 2011.
• Healthcare Spending - Total Healthcare Spending, NHS Spending beyond 2011, Healthcare Capital Investment
• Healthcare Output - Government Targets and progress of key healthcare building programmes to date - NHS LIFT, Express LIFT, Procure 21 & Procure 21+
• Other sectors - Defence, Custodial, Police, Arts, Sport - capital spending levels, key influencing factors.

PROCUREMENT OF PUBLIC SECTOR WORK

• Overview of the Private Finance Initiative - analysis by sector in 2009. Future direction and prospects for PFI.
• PFI in Education - BSF.
• PFI in Healthcare - NHS LIFT.
• Procurement in other Public Sectors - Defence, Police Service, Prison Service, Fire & Rescue Service etc. - key programmes, capital values, role of PFI, future prospects etc.

CONSTRUCTION MARKET SUPPLY

• Structure & Size of the Contracting Industry - consolidation activity.
• Leading Clients in the Public Sector Construction Market - key players, future plans.
• Leading Contractors and Consortia operating in the Public Sector Construction Market - profiles of major players, areas of specialisation.

FACTORS AFFECTING PUBLIC SECTOR CONSTRUCTION

• Planned future public sector expenditure 2009-2014.
• Impact of public spending cuts on public sector construction - key programmes, areas of major risk etc. - 2008 and 2009 Pre-budget Reports.
• Impact of a Conservative government on public sector construction - priorities, targets for cuts etc.
• Sustainability Issues - BREEAM in education, healthcare, defence & custodial sectors.

Table of Contents

1. INTRODUCTION 4

2. EXECUTIVE SUMMARY AND FUTURE PROSPECTS 6

3. PUBLIC SECTOR CONSTRUCTION MARKET 10

• 3.1 CONSTRUCTION MARKET OVERVIEW 10
  • 3.1.1 Value of Output - Construction New Work 10
  • 3.1.2 Construction Output in 2009 11
  • 3.1.3 Outlook for 2010 and Beyond 13
• 3.2 PUBLIC SECTOR (NON-RESIDENTIAL) CONSTRUCTION MARKET 15
  • 3.2.1 Public Sector Construction Output in 2009 15
  • 3.2.2 Outlook for 2010 and Beyond 17
• 3.3 SECTOR ANALYSIS 20
  • 3.3.1 Healthcare Sector 20
  • 3.3.2 Education Sector 21
  • 3.3.3 Defence Sector 23
  • 3.3.4 Other Public Sector Categories 23

4. FUNDING OF PUBLIC SECTOR WORK 26

• 4.1 PUBLIC SECTOR INVESTMENT 26
  • 4.1.1 Current & Forecast Public Sector Investment 26
• 4.2 EDUCATION SPENDING 27
  • 4.2.1 Total Education Spending 27
  • 4.2.2 DCSF Spending 28
  • 4.2.3 Education Capital Investment 29
  • 4.2.4 Education Output - Government Targets and Progress to Date 30
• 4.3 HEALTHCARE SPENDING 37
  • 4.3.1 Total Healthcare Spending 37
  • 4.3.2 NHS Spending 37
  • 4.3.3 Healthcare Capital Investment 39
  • 4.3.4 Healthcare Output - Government Targets and Progress to Date 40

5. PROCUREMENT OF PUBLIC SECTOR WORK 43

• 5.1 PRIVATE FINANCE INITIATIVE (PFI) 43
  • 5.1.1 PFI in Education 44
  • 5.1.2 PFI in Healthcare 48
  • 5.1.3 Procurement in other Public Sectors 51

6. MAJOR CONTRACTORS 55

• 6.1 STRUCTURE OF THE CONTRACTING INDUSTRY 55
  • 6.1.1 Consolidation Activity 56
• 6.2 LEADING CLIENTS IN THE PUBLIC SECTOR MARKET 56
• 6.3 LEADING CONSTRUCTION CONTRACTORS IN THE PUBLIC SECTOR MARKET 58
  • 6.3.1 Overview 58
  • 6.3.2 Key Contractor Profiles 59

7. FACTORS AFFECTING PUBLIC SECTOR CONSTRUCTION 68

• 7.1 PLANNED FUTURE PUBLIC SECTOR EXPENDITURE 68
• 7.2 IMPACT OF A CONSERVATIVE GOVERNMENT ON PUBLIC SECTOR CONSTRUCTION 73
• 7.3 SUSTAINABILITY 76
  • 7.3.1 BREEAM 76

TABLES AND CHARTS

• TABLE 1 GOVERNMENT SPENDING BY DEPARTMENT (HEALTH, EDUCATION, DEFENCE ETC) 2008 - 10 (£BILLION) 6
• CHART 2 VALUE OF NON-DOMESTIC CONSTRUCTION OUTPUT 2008 - 2014 BY VALUE (£ BILLION AT CURRENT PRICES) 10
• CHART 3 VALUE OF NON-DOMESTIC CONSTRUCTION OUTPUT NEW WORK & RMI BY SECTOR - % BY VALUE 2009 11
• CHART 4 PUBLIC SECTOR CONSTRUCTION OUTPUT - % BY TYPE OF WORK 2009 16
• TABLE 5 CONTRACTORS OUTPUT IN THE PUBLIC (NON-RESIDENTIAL) SECTOR 2004-2014 (£M) 18
• TABLE 6 - SUMMARY OF PUBLIC SECTOR INVESTMENT AND MAJOR CAPITAL SPENDING PROGRAMMES IN EDUCATION & HEALTH 2006-2014 BY PROGRAMME VALUE 19
• TABLE 7 CONTRACTORS OUTPUT OF HEALTH SECTOR WORK (PUBLIC/PRIVATE) 1999-2009 (£M) 21
• TABLE 8 CONTRACTORS OUTPUT OF EDUCATION SECTOR WORK (PUBLIC/PRIVATE) 1999- 2009 (£M) 22
• TABLE 9 PUBLIC SECTOR GROSS SPENDING 2004 - 2014 (£ BILLION) 26
• CHART 10 PUBLIC SECTOR GOVERNMENT SPENDING - % BY FUNCTION 2009-10 27
• CHART 11 VALUE OF TOTAL UK EDUCATION EXPENDITURE 2005-2011 (£ BILLION) 28
• TABLE 12 DCSF SPENDING 2006 - 2011 - MIX BY RESOURCES & CAPITAL (£ BILLION) 29
• CHART 13 UK SCHOOLS CAPITAL EXPENDITURE 2006-2011 (£ BILLION) 30
• TABLE 14 CONSTRUCTION ACTIVITY IN THE UK EDUCATION SECTOR - KEY PROGRAMMES -PROGRESS TO DATE DECEMBER 2009 AND TARGETS UP TO 2010-11 32
• TABLE 15 BUILDING SCHOOLS FOR THE FUTURE - SUMMARY OF INVESTMENT AND BUILD PROGRAMME 2009 33
• TABLE 16 PRIMARY CAPITAL PROGRAMME - FUNDING 2008 - 2012 (£M) 36
• CHART 17 VALUE OF UK NHS EXPENDITURE 2006-2011 (£ BILLION) 38
• TABLE 18 UK NHS PRIMARY CARE TRUST SPENDING ALLOCATIONS - 2006-2011 (£BILLION) 39
• TABLE19 NHS CAPITAL SPENDING - 2007-2011 (£BILLION) 40
• TABLE 20 CONSTRUCTION ACTIVITY IN THE UK HEALTHCARE SECTOR - KEY PROGRAMMES - PROGRESS TO DATE DECEMBER 2009 42
• CHART 21 PFI INVESTMENT IN 2009 (BY GOVERNMENT DEPARTMENT) 44
• TABLE 22 LEADING EDUCATION CONTRACTORS AND PRINCIPAL CONSORTIA (PFI / BSF) 47
• TABLE 23 PFI HEALTH SCHEMES* - BY STAGE OF DEVELOPMENT & FUNDING VALUE (AS AT SEPTEMBER 2009) 48
• TABLE 24 MAIN PRIVATE CONTRACTORS - BY NUMBER OF EMPLOYEES 2007 -2008 55
• TABLE 25 TOP PUBLIC SECTOR CLIENTS 57
• TABLE 26 LEADING CONTRACTORS BY PUBLIC SECTOR (NON-HOUSING) WORK WON (£M) - 12 MONTHS TO OCTOBER 2009 58
• CHART 27 PUBLIC SECTOR CAPITAL INVESTMENT 2007 - 2014 (£BILLION) 71
• TABLE 28 CONSERVATIVE POLICY ON SCHOOLS 74

Related Reports