Transport schemes make up more than half of future government construction spend

Gurjit Degun
11 August 2014

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12 August 2014 | Gurjit Degun

Transport projects dominate the UK government’s planned construction spend, worth a total of £66.2 billion according to analysis by KPMG.

The 'construction pipeline', a detailed list of government-led current and planned construction and infrastructure activity, has a total allocated value of £116 billion.

The report looks at the forecast spend by central and local government across 1,886 projects in three spend periods: 2014-16, 2016-20, and 2020 and beyond.

KPMG found 40 per cent of the projects are described as “due to complete before 2016, but these projects represent only 7 per cent of the total allocated pipeline value”. Just under a fifth are due to complete after 2016, and a third of projects have no specified completion date.

Richard Threlfall, KPMG’s UK head of infrastructure, building and construction, said that it is “concerning that that a third of the total projects currently have no specified completion date”. He predicted business confidence would grow if there were confirmed timescales.

The analysis also found energy projects are the second largest category by value at £14.8 billion, nearly 13 per cent of the total pipeline value. “The value is less than what might be expected as most energy projects in the UK are procured by the private sector, not directly by the UK government, and consequently do not appear in the pipeline,” the report said.

Projects in the defence, justice and police sectors make up 70 per cent of the pipeline by number, yet contribute to only 7 per cent of the total pipeline value.

In terms of region, almost one-third of projects are in the south-east and south-west. Although, by value, “nearly half are national projects benefitting the whole of England such as HS2 and national road schemes,” said KPMG.

Threlfall added: “The total number of schemes is over 1,800, but in practice most of those schemes are individually of small value.

“We welcome the government’s initiative in developing the construction pipeline, but more needs to be done to increase the completeness and robustness of the data.

“We will be issuing analysis on future updates to the pipeline and we hope that there will be improvements in the data set so it becomes a reliable planning tool against which the UK construction industry can plan and invest with confidence.”

A Cabinet Office spokesman said: “As part of our long-term economic plan the government construction pipeline is helping businesses of all sizes prepare to bid for government contracts. Our planned £116 billion investment will be a great boost to the economy. We are building on the success of our pipeline programme by making it more searchable and user-friendly, enhancing data and extending its reach to other departments.”

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