Public Sector (Non-Residential) Construction Market UK 2008-2012

SUMMARY

This is the 2nd Edition of the Public Sector (Non-Residential) Construction Market in the United Kingdom report. The report should be of particular interest to all companies involved in or supplying into public sector construction. Among a wealth of detail, the report includes forecasts of future developments up to 2012.

Key areas within the report are:

• An overall review of the UK construction industry with estimated forecasts for growth up to 2012.
• Detailed assessment of the major sectors within public sector construction including education, healthcare, defence and law and order
• An in-depth analysis of Government funding of public sector areas including education, healthcare and defence.
• A review of Government targets and current progress of construction initiatives within the education and healthcare sectors, such as Building Schools for the Future.
• A review of the major influences affecting the public sector construction market and prospects up to 2012.

Of particular interest:

• Analysis of the 2007 Comprehensive Spending Review which sets out Government spending plans from 2008-09 to 2010-11 including capital expenditure rises in the NHS to £8.1bn a year by 2010-2011 and in education to £8.2bn a year by 2010-2011.
• The way in which Government clients procure public sector construction work varies and the Report assesses some of the major procurement routes including PFI, NHS LIFT and Procure21.
• The use of prefabricated buildings for public sector work has increased as a result of government initiatives such as BSF and the emphasis of NHS care within the primary sector.
• A brief summary of the UK contracting industry and profiles of leading contractors and clients in the public sector construction market.
• Key drivers of growth in the public sector construction market and estimated forecasts for growth up to 2012.

Key areas covered in the report include:

UK PUBLIC SECTOR CONSTRUCTION MARKET

• Value of Total Construction New Work Output in the United Kingdom.
• Forecasts for construction output to 2012.
• Analysis of Public Sector Output in the UK Construction Industry with forecasts to 2012.
• Review of main public sector areas such as education, healthcare and defence - capital investment, building programmes, timescales etc.
• Analysis of the main drivers and constraints of growth in the construction industry - key areas of growth up to 2012.

FUNDING OF PUBLIC SECTOR WORK

• Analysis of public sector investment by the Government.
• Review of the 2007 Spending Reviews.
• Overall investment and capital expenditure in the education and healthcare sectors.
• Review of Government targets and current progress of construction initiatives within the education and healthcare sectors, such as Building Schools for the Future - planned building programmes, construction values, timescales, barriers etc.

PROCUREMENT OF PUBLIC SECTOR WORK

• Procurement processes for public sector work - overview, trends, drivers etc.
• Education work procurement routes including PFI.
• Healthcare work procurement routes including PFI, NHS LIFT and Procure21.
• Defence procurement routes - Project SLAM etc.
• Use of Frameworks in the Public Sector.
• Review of major contractors - leading players, market shares, profiles etc.

FACTORS AFFECTING THE PUBLIC SECTOR CONSTRUCTION MARKET

• Analysis of the rise in construction costs and building materials prices with a review of recent % rises in specific building materials.
• Overview of construction employment levels, labour costs and skills shortages within the UK construction industry.
• Environmental concerns in public sector construction including sustainable construction, the 2007 Energy White Paper and the use of renewable sources of energy in the construction industry.
• The application of Modern Methods of Construction and offsite manufacturing techniques in public sector construction and their application to education, healthcare and defence projects.

The report is extensive with over 85 pages and 30 tables and charts.

TABLE OF CONTENTS

1. INTRODUCTION

2. EXECUTIVE SUMMARY AND FUTURE PROSPECTS

3. PUBLIC SECTOR CONSTRUCTION MARKET

• 3.1 CONSTRUCTION MARKET OVERVIEW
  • 3.1.1 Value of Output - Construction New Work
  • 3.1.2 Construction Output in 2007
  • 3.1.3 Outlook for 2008 and Beyond
• 3.2 PUBLIC SECTOR (NON-RESIDENTIAL) CONSTRUCTION MARKET
  • 3.2.1 Public Sector Construction Output in 2007
  • 3.2.2 Outlook for 2008 and Beyond
• 3.3 SECTORAL ANALYSIS
  • 3.3.1 Healthcare Sector
  • 3.3.2 Education Sector
  • 3.3.3 Defence Sector
  • 3.3.4 Other Public Sector Categories

4. FUNDING OF PUBLIC SECTOR WORK

• 4.1 PUBLIC SECTOR INVESTMENT
  • 4.1.1 Current & Forecast Public Sector Investment
  • 4.1.2 The 2007 Spending Review
• 4.2 EDUCATION SPENDING
  • 4.2.1 Total Education Spending
  • 4.2.2 DCSF Spending
  • 4.2.3 Education Capital Investment
  • 4.2.4 Education Output - Government Targets and Progress to Date
• 4.3 HEALTHCARE SPENDING
  • 4.3.1 Total Healthcare Spending
  • 4.3.2 NHS Spending
  • 4.3.3 Healthcare Capital Investment
  • 4.3.4 Healthcare Output - Government Targets and Progress to Date

5 PROCUREMENT OF PUBLIC SECTOR WORK

• 5.1 PROCUREMENT PROCESS FOR PUBLIC SECTOR WORK
  • 5.1.1 Private Finance Initiative (PFI)
  • 5.1.2 Defence Procurement
  • 5.1.3 Frameworks

6. MAJOR CONTRACTORS

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

7. FACTORS AFFECTING PUBLIC SECTOR CONSTRUCTION

• 7.1 CONSTRUCTION EMPLOYMENT
  • 7.1.1 Employment Levels
  • 7.1.2 Skills Shortages
  • 7.2 CONSTRUCTION COSTS
  • 7.2.1 Construction Materials Costs
  • 7.2.2 Increased Energy Prices
• 7.3 LEGISLATIVE DRIVERS
  • 7.3.1 Fair Payment Guide
  • 7.3.2 Energy White Paper/Renewable Energy Sources
• 7.4 ENVIRONMENTAL CONCERNS IN PUBLIC SECTOR CONSTRUCTION
  • 7.4.1 Sustainable Construction
• 7.5 PREFABRICATED BUILDINGS
  • 7.5.1 Application to Healthcare Projects
  • 7.5.2 Application to Education Projects
  • 7.5.3 Application to Defence Projects

TABLES AND CHARTS

• TABLE 1 GOVERNMENT SPENDING BY FUNCTION 2007 (£BN)
• CHART 2 VALUE OF CONSTRUCTION OUTPUT NEW WORK 2002-2012 (£ BILLION)
• CHART 3 VALUE OF CONSTRUCTION OUTPUT NEW WORK BY SECTOR - % BY VALUE 2007
• CHART 4 PUBLIC SECTOR CONSTRUCTION OUTPUT - % BY TYPE OF WORK 2007
• TABLE 5 CONTRACTORS OUTPUT IN THE PUBLIC (NON-RESIDENTIAL) SECTOR 2002-2012 (£M)
• TABLE 6 - SUMMARY OF PUBLIC SECTOR INVESTMENT AND MAJOR CAPITAL SPENDING PROGRAMMES IN EDUCATION & HEALTH 2006-2013
• TABLE 7 CONTRACTORS OUTPUT OF HEALTH SECTOR WORK (PUBLIC/PRIVATE) 1997-2007 (£M)
• TABLE 8 CONTRACTORS' OUTPUT OF EDUCATION SECTOR WORK (PUBLIC/PRIVATE) 1997-2007 (£M)
• TABLE 9 PUBLIC SECTOR GROSS CAPITAL SPENDING 2001 - 2011 (£ BILLION)
• CHART 10 PUBLIC SECTOR GOVERNMENT SPENDING - % BY FUNCTION 2007-08
• TABLE 11 COMPREHENSIVE SPENDING REVIEW 2007 - KEY POINTS
• CHART 12 VALUE OF TOTAL UK EDUCATION EXPENDITURE 2005-2011 (£ BILLION)
• TABLE 13 DCSF SPENDING 2007 - 2011 (£ BILLION)
• CHART 14 UK EDUCATION CAPITAL EXPENDITURE 2006-2011 (£ BILLION)
• TABLE 15 CONSTRUCTION ACTIVITY IN THE UK EDUCATION SECTOR - PROGRESS TO DATE DECEMBER 2007
• TABLE 16 BUILDING SCHOOLS FOR THE FUTURE - SUMMARY OF INVESTMENT AND BUILD PROGRAMME 2007
• CHART 17 VALUE OF UK NHS EXPENDITURE 2006-2011 (£ BILLION)
• TABLE 18 UK NHS PRIMARY CARE TRUST SPENDING ALLOCATIONS - 2006-2011 (£BN)
• TABLE 19 UK NHS CAPITAL SPENDING - 2005-2011 (£M)
• TABLE 20 CONSTRUCTION ACTIVITY IN THE UK HEALTHCARE SECTOR - PROGRESS TO DATE DECEMBER 2007
• CHART 21 PFI INVESTMENT IN 2007 (BY GOVERNMENT DEPARTMENT)
• TABLE 22 BUILDING SCHOOLS FOR THE FUTURE - KEY PRIVATE CONSORTIA
• TABLE 23 ESTIMATED CAPITAL EXPENDITURE ON PFI HEALTH SCHEMES 1999-2009
• TABLE 24 LARGEST PROCURE21 CONTRACTS AWARDED IN 2007/08
• TABLE 25 MAIN PRIVATE CONTRACTORS - BY NUMBER OF EMPLOYEES 2006
• TABLE 26 TOP PUBLIC SECTOR CLIENTS
• TABLE 27 LEADING CONTRACTORS BY PUBLIC SECTOR (NON-HOUSING) WORK WON (£M) - 12 MONTHS TO DECEMBER 2007
• TABLE 28 CONSTRUCTION PERSONNEL REQUIREMENTS 2007-2011
• TABLE 29 % INCREASE IN BUILDING MATERIALS IN THE UK (NOVEMBER 2006 - NOVEMBER 2007)
• TABLE 30 % INCREASES IN WHOLESALE ENERGY PRICES 2006-2007 (3RD QUARTER)*