AMA Research have published the 6th edition of the 'Education Construction Market Report - UK 2015-2019 Analysis'. This report specifically focuses on construction activity within the primary, secondary and higher education sectors against a backdrop of a new Conservative government and the prospect of continued public sector funding constraints.
Key issues covered:
- Market overview - detailed assessment of the structure, size and funding of the primary, secondary and higher education sectors.
- Key market trends - and the impact of government spending on education projects and capital programmes.
- Capital building programmes - in-depth analysis of the UK education sector.
- Contractors output - recent data and trends in the UK education construction market and outlook for the sector, with forecasts to 2019.
- Contractor review - leading construction contractors in the schools, higher education and student accommodation sectors.
Key areas of insight include:
- Review of Government spending plans as announced in the 2014 Autumn Statement and 2015 March and June Budgets and a look forward to the forthcoming 2015 Spending Review.
- Overview of contractor and consortia capability and experience in primary, secondary and higher education construction work.
- Review of main procurement routes and construction programmes used in education construction work, including use of PF2 on PSBP.
- In-depth analysis of higher education construction market - focus on the impact of rising student numbers, higher tuition fees and cuts to capital budgets on university infrastructure and capital building programmes - student accommodation market, Enterprise Zones etc.
Some of the companies included:
Balfour Beatty, BAM, Bouygues UK, Bowmer & Kirkland, Carillion, Downing Developments, Galliford Try, Interserve, Kier, Laing O'Rourke, Morgan Sindall, Osborne, Sir Robert McAlpine, Wates, Watkin Jones, Willmott Dixon.
Key areas covered in the report include:
PRIMARY, SECONDARY AND HIGHER EDUCATION IN THE UK
- Types of Schools in the UK - mainstream and other State Schools, Independent schools.
- State education funding in the UK - DfE Spending, 2014 Autumn Statement, 2015 Budgets.
- Education budgets - Scotland, Wales and Northern Ireland.
- Overview and Structure of the UK HE sector, rise of the New Universities and the role of private providers.
- Factors impacting the HE sector - student growth, Applications, tuition fees rises and impact on student numbers.
- Higher education funding - sources of funding, HEFCE funding for England, HEFCW funding for Wales, SFC funding
- for Scotland.
- Endowment funds and bond markets in the HE sector.
EDUCATION CONSTRUCTION IN THE UK
- Total construction output - value of output construction new work to 2019 and construction output by sector.
- Contractors output in the education sector and output in the higher education sector Outlook for education construction work.
- Education capital spending - England, Scotland, Wales, Northern Ireland. 2011-2016 - key programmes.
- PFI in the education sector, use of PF2 in the education sector.
- Education capital building programmes - PSBP 1&2, Academies Programme, Free Schools, UTCs,
- Scotland's Schools for the Future Programme, Wales' 21st Century Schools. - Budgets, timing of programmes etc.
- MEFA Contractors Framework - funding Programmes - key authorities, contractors, budget values etc. EFA Regional Frameworks.
- PSBP Agreements - key issues, budgets.
- Scotland - Government Education major projects pipeline 2015-2018 - scheme, value, status etc.
- Capital expenditure in the Higher education sector - England, Scotland, Wales. - Budgets, Key Universities.
- University estates - size, capital spending and infrastructure backlog.
- University capital building programmes - teaching, research, University Technical Colleges, Enterprise Zones.
- Student Accommodation Sector - Types, Regional Provision, London Market, Commercial Providers of student accommodation (shares), investment funds, student accommodation development pipeline and market outlook.
CONSTRUCTION SUPPLY IN THE EDUCATION SECTOR
- Leading Construction Contractors in the Schools Sector - Overview and contract experience and awards 2014-15.
- Leading Construction Contractors in the Higher Education Sector - Overview and contract experience
- and awards in 2014-15.
- Contractor experience in the Student Accommodation Sector.
- Procurement of projects in the Higher Education Sector.
SUMMARY OF REPORT CONTENTS
Overall current, or day-to-day, school spending in England has been relatively protected over the past 5 years, compared with other areas of public service spending and other areas of education spending. Current spending on schools increased by 3% in real terms 2010-15. However, across the education sector, capital spending has been cut by over one third in real-terms which has had a negative impact on construction output in the sector.
The pupil population is expanding rapidly and overall pupil numbers are expected to grow by 7% 2016-20. This growth in pupil numbers will place additional pressures on both resource and capital budgets, which is expected to be more keenly felt in London and the South East. In addition, recently announced cuts of £900m to the DfE and BIS budgets announced in the 2015 Budget are likely to impact higher education and further education budgets and the administration of arms lengths bodies in the DfE.
Education construction output increased by around 19% in 2014, bringing it back to the same level as 2010, prior to the scrapping of the BSF programme. Increased output rates are being driven by ongoing investment in key building programmes including the PSBP and programmes to deliver new and refurbished facilities for the primary and secondary schools estate such as the Academies Programme. In addition, further education has also benefited from improvements and new facilities for FE colleges whilst the University Technical Colleges programme is likely to boost output growth into the medium-term, though universities remain a small market in terms of construction.
The key to the future of education output remains the rate of procurement and funding of key national building programmes and the continued use of PF2 to fund the programme. In the new build sector, the Government's Priority Schools Building Programme (PSBP) is expected to generate increased workloads in 2016 along with other major programmes in the schools sector. Investment is also increasing among UK universities as competition to attract overseas students intensifies and there is a particularly buoyant pipeline of ongoing new work at a number of universities as part of major long-term development programmes. Going into 2016 and beyond, the outlook for the student accommodation sector also remains positive, with student numbers expected to increase with the removal of the cap on student numbers, and the acute undersupply in many of the major university towns across the UK.