| 1. |
INTRODUCTION |
6 |
| 2. |
EXECUTIVE SUMMARY AND FUTURE PROSPECTS |
7 |
| 3. |
PUBLIC SECTOR CONSTRUCTION MARKET |
12 |
| 3.1 |
CONSTRUCTION MARKET OVERVIEW |
12 |
| 3.1.1 |
Value of Output – Construction New Work |
12 |
| 3.1.2 |
Construction Output in 2007 |
13 |
| 3.1.3 |
Outlook for 2008 and Beyond |
15 |
| 3.2 |
PUBLIC SECTOR (NON-RESIDENTIAL) CONSTRUCTION MARKET |
16 |
| 3.2.1 |
Public Sector Construction Output in 2007 |
16 |
| 3.2.2 |
Outlook for 2008 and Beyond |
18 |
| 3.3 |
SECTORAL ANALYSIS | 21 |
| 3.3.1 |
Healthcare Sector | 21 |
| 3.3.2 |
Education Sector | 22 |
| 3.3.3 |
Defence Sector | 23 |
| 3.3.4 |
Other Public Sector Categories |
24 |
| 4. |
FUNDING OF PUBLIC SECTOR WORK |
26 |
| 4.1 |
PUBLIC SECTOR INVESTMENT |
26 |
| 4.1.1 |
Current & Forecast Public Sector Investment |
26 |
| 4.1.2 |
The 2007 Spending Review |
27 |
| 4.2 |
EDUCATION SPENDING | 30 |
| 4.2.1 |
Total Education Spending |
30 |
| 4.2.2 |
DCSF Spending | 31 |
| 4.2.3 |
Education Capital Investment |
32 |
| 4.2.4 |
Education Output - Government Targets and Progress to Date |
34 |
| 4.3 |
HEALTHCARE SPENDING | 38 |
| 4.3.1 |
Total Healthcare Spending |
39 |
| 4.3.2 |
NHS Spending | 39 |
| 4.3.3 |
Healthcare Capital Investment |
43 |
| 4.3.4 |
Healthcare Output - Government Targets and Progress to Date |
44 |
| 5 |
PROCUREMENT OF PUBLIC SECTOR WORK |
48 |
| 5.1 |
PROCUREMENT PROCESS FOR PUBLIC SECTOR WORK |
48 |
| 5.1.1 |
Private Finance Initiative (PFI) |
48 |
| 5.1.2 |
Defence Procurement | 56 |
| 5.1.3 |
Frameworks | 57 |
| 6. |
MAJOR CONTRACTORS |
59 |
| 6.1 |
STRUCTURE OF THE CONTRACTING INDUSTRY |
59 |
| 6.1.1 |
Consolidation Activity |
60 |
| 6.2 |
LEADING CLIENTS IN THE PUBLIC SECTOR MARKET |
61 |
| 6.3 |
LEADING CONSTRUCTION CONTRACTORS IN THE PUBLIC SECTOR MARKET |
64 |
| 6.3.1 |
Overview | 64 |
| 6.3.2 |
Key Contractor Profiles |
65 |
| 7. |
FACTORS AFFECTING PUBLIC SECTOR CONSTRUCTION |
75 |
| 7.1 |
CONSTRUCTION EMPLOYMENT |
75 |
| 7.1.1 |
Employment Levels | 75 |
| 7.1.2 |
Skills Shortages | 76 |
| 7.2 |
CONSTRUCTION COSTS | 77 |
| 7.2.1 |
Construction Materials Costs |
77 |
| 7.2.2 |
Increased Energy Prices |
78 |
| 7.3 |
LEGISLATIVE DRIVERS | 79 |
| 7.3.1 |
Fair Payment Guide | 79 |
| 7.3.2 |
Energy White Paper/Renewable Energy Sources |
80 |
| 7.4 |
ENVIRONMENTAL CONCERNS IN PUBLIC SECTOR CONSTRUCTION |
80 |
| 7.4.1 |
Sustainable Construction |
80 |
| 7.5 |
PREFABRICATED BUILDINGS |
81 |
| 7.5.1 |
Application to Healthcare Projects |
82 |
| 7.5.2 |
Application to Education Projects |
82 |
| 7.5.3 |
Application to Defence Projects |
83 |
| TABLES AND CHARTS |
| TABLE 1 |
GOVERNMENT SPENDING BY FUNCTION 2007 (£BN) |
7 |
| CHART 2 |
VALUE OF CONSTRUCTION OUTPUT NEW WORK 2002-2012 (£ BILLION) |
12 |
| CHART 3 |
VALUE OF CONSTRUCTION OUTPUT NEW WORK BY SECTOR - % BY VALUE 2007 |
13 |
| CHART 4 |
PUBLIC SECTOR CONSTRUCTION OUTPUT - % BY TYPE OF WORK 2007 |
17 |
| TABLE 5 |
CONTRACTORS OUTPUT IN THE PUBLIC (NON-RESIDENTIAL) SECTOR 2002-2012 (£M) |
19 |
| TABLE 6 |
- SUMMARY OF PUBLIC SECTOR INVESTMENT AND MAJOR CAPITAL SPENDING PROGRAMMES IN EDUCATION & HEALTH 2006-2013 |
20 |
| TABLE 7 |
CONTRACTORS OUTPUT OF HEALTH SECTOR WORK (PUBLIC/PRIVATE) 1997-2007 (£M) |
21 |
| TABLE 8 |
CONTRACTORS’ OUTPUT OF EDUCATION SECTOR WORK (PUBLIC/PRIVATE) 1997-2007 (£M) |
23 |
| TABLE 9 |
PUBLIC SECTOR GROSS CAPITAL SPENDING 2001 - 2011 (£ BILLION) |
26 |
| CHART 10 |
PUBLIC SECTOR GOVERNMENT SPENDING - % BY FUNCTION 2007-08 |
27 |
| TABLE 11 |
COMPREHENSIVE SPENDING REVIEW 2007 – KEY POINTS |
29 |
| CHART 12 |
VALUE OF TOTAL UK EDUCATION EXPENDITURE 2005-2011 (£ BILLION) |
31 |
| TABLE 13 |
DCSF SPENDING 2007 – 2011 (£ BILLION) |
32 |
| CHART 14 |
UK EDUCATION CAPITAL EXPENDITURE 2006-2011 (£ BILLION) |
33 |
| TABLE 15 |
CONSTRUCTION ACTIVITY IN THE UK EDUCATION SECTOR – PROGRESS TO DATE DECEMBER 2007 |
35 |
| TABLE 16 |
BUILDING SCHOOLS FOR THE FUTURE – SUMMARY OF INVESTMENT AND BUILD PROGRAMME 2007 |
37 |
| CHART 17 |
VALUE OF UK NHS EXPENDITURE 2006-2011 (£ BILLION) |
40 |
| TABLE 18 |
UK NHS PRIMARY CARE TRUST SPENDING ALLOCATIONS – 2006-2011 (£BN) |
41 |
| TABLE 19 |
UK NHS CAPITAL SPENDING – 2005-2011 (£M) |
44 |
| TABLE 20 |
CONSTRUCTION ACTIVITY IN THE UK HEALTHCARE SECTOR – PROGRESS TO DATE DECEMBER 2007 |
46 |
| CHART 21 |
PFI INVESTMENT IN 2007 (BY GOVERNMENT DEPARTMENT) |
49 |
| TABLE 22 |
BUILDING SCHOOLS FOR THE FUTURE – KEY PRIVATE CONSORTIA |
52 |
| TABLE 23 |
ESTIMATED CAPITAL EXPENDITURE ON PFI HEALTH SCHEMES 1999-2009 |
53 |
| TABLE 24 |
LARGEST PROCURE21 CONTRACTS AWARDED IN 2007/08 |
56 |
| TABLE 25 |
MAIN PRIVATE CONTRACTORS - BY NUMBER OF EMPLOYEES 2006 |
60 |
| TABLE 26 |
TOP PUBLIC SECTOR CLIENTS |
62 |
| TABLE 27 |
LEADING CONTRACTORS BY PUBLIC SECTOR (NON-HOUSING) WORK WON (£M) – 12 MONTHS TO DECEMBER 2007 |
64 |
| TABLE 28 |
CONSTRUCTION PERSONNEL REQUIREMENTS 2007-2011 |
76 |
| TABLE 29 |
% INCREASE IN BUILDING MATERIALS IN THE UK (NOVEMBER 2006 - NOVEMBER 2007) |
78 |
| TABLE 30 |
% INCREASES IN WHOLESALE ENERGY PRICES 2006-2007 (3RD QUARTER)* |
79 |
