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2013 Preview: Construction pipelines

A refined and more detailed approach to the government’s construction offers some positive signs for companies looking for work.

However, the construction pipeline, which is produced by the Cabinet Office, was larger in 2011/12, with £114.bn of work, than it will be in 2012/13, when there will be £11.1bn. In 2013/14 it contains £10.4bn of projects; £8.8bn the year after.

The latest edition of the construction pipeline, released in November, recorded 1,200 projects and programmes, and around £40bn of investment to 2014/15 and beyond. It is mainly focused on social infrastructure, excluding rail and other regulated and private sector infrastructure investment.

As time goes on, the government is aiming to capture all central government construction spending. 

There are now a further 500 local authority highways procurements in addition to the 600 centrally funded projects.

Schemes with the earliest start date of 2013 include a £92m Thames flooding scheme. The £90m Rossall coastal defence improvement scheme is down for an earliest construction start of February 2014.

This year should also see the start of further education colleges valued at £218m of capital works, with £81m from the public sector, according to the Skills Funding Agency entry on the pipeline.

One of the schemes on the list is the £300m North Tees and Hartlepool NHS Foundation Trust hospital, which is being bid by Laing O’Rourke, Brookfield Multiplex and Iridium Concesiones de Infraestructuras.

The next update to the construction pipeline is planned for April, when the benefits of the outsourcing should be seen and clearer signalling should be given concerning the breakdown of work.

Meanwhile the National Infrastructure Pipeline, which is produced by the Treasury, has a particular focus on energy, where investment has risen by £66bn. The total infrastructure pipeline now sits at £333bn – 85 per cent of it is now expected to be privately funded, as opposed to 70 per cent previously talked about.

The arrival at the Treasury of Olympic legacy chief Paul Deighton earlier this month will mean an assessment of how well each department can efficiently procure infrastructure. Mr Deighton will report back at the Budget on 20 March.

The Treasury is reluctant to talk about a pipeline for private finance 2, but 2013 may mark the starting point for such projects.

The PF2 guidance documents state that the Treasury will work with departments to assess which future projects are eligible for PF2.

The first is the Education Funding Agency and the £2bn Priority School Building Programme. Other departments – such as health and defence – are likely to follow.

 

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