The government’s Construction Pipeline is dominated by a handful of high value transport projects and a large number of low value schemes, according to analysis of official data carried out by KPMG.
The Construction Pipeline is a detailed list of current and planned government-led infrastructure and construction projects to be carried out during three spend periods: 2014-16, 2016-2020, and 2020 and beyond. It was compiled by Barbour ABI for the government.
KPMG’s analysis of the list showed that road and rail projects, including phase one of the massive HS2 project, account for 5% of the total 1,886 projects due to be completed, but will consume 57%, or £66.2bn, of the total £116bn pipeline spend.
In contrast, projects in the defence, justice and police sectors make up the majority, 70%, of the entire portfolio, by number, but just 7% by value.
Commenting on the figures, Richard Threlfall, UK head of infrastructure, building and construction at KPMG, said: “Our analysis shows the huge dominance of rail and road schemes in the government’s infrastructure spend. The total number of schemes is over 1,800, but in practice most of those schemes are individually of small value.”
Allocated pipeline value by sector
Energy projects are the second largest category in the pipeline by value, accounting for £14.8bn or almost 13% of the total pipeline value. KPMG considers this figure low because most energy projects in the UK are procured by the private sector, not directly by government, and consequently do not appear in this pipeline.
Education accounts for £9.8bn of the spend by 2020, £5.4bn for the balance of spending outlined in Investing in Britain’s Future 2013, £1.9bn for the remaining Priority Schools Building programme, and £2.5bn mainly of projects to be delivered via the local authority devolved budgets for maintenance, repairs and refurbishments on existing infrastructure.
Housing and regeneration projects will receive £5.9bn – £4.7bn for the affordable homes programme, £0.6bn for the long-term Decent Homes Backlog programme and £0.5bn for the few remaining Housing PFI projects under construction.
Volume of projects by sector
Health accounts for £3.7bn, approximately £2.3bn of NHS-led large-scale hospital rebuilds and configurations, the remaining £1.4bn for the small works and capital programme procured via the Procure 21 and Procure 21+ framework.
The MoD, justice and police force projects account for £8.6bn, to be spent on investment in refurbishment, maintenance programmes and small works/capital programmes.
In terms of the regional split, nearly one-third of projects are in the south east and south west, but by value, nearly half are national projects benefiting the whole of England such as HS2 and national road schemes.
A total 40% of projects are stated as due to complete before 2016, but these projects represent only 7% of the total allocated pipeline value. Just under a fifth are due to complete after 2016 and a third of projects currently have no specified completion date.
Threlfall commented: “It is concerning that a third of the total projects currently have no specified completion date as industry confidence in the pipeline would be improved if there was certainty around timescales to get schemes delivered.”
He added: “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.”
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