Education Construction Market Report - UK 2015-2019 Analysis
Published: 01/10/2015 / Number of Pages: 100 / Price: £745.00
Introduction and Overview
AMA Research have published the 6th edition of the 'Education Construction Market Report - UK 2015-2019 Analysis'. This report specifically focuses on construction activity within the primary, secondary and higher education sectors against a backdrop of a new Conservative government and the prospect of continued public sector funding constraints.
Key issues covered:
- Market overview - detailed assessment of the structure, size and funding of the primary, secondary and higher education sectors.
- Key market trends - and the impact of government spending on education projects and capital programmes.
- Capital building programmes - in-depth analysis of the UK education sector.
- Contractors output - recent data and trends in the UK education construction market and outlook for the sector, with forecasts to 2019.
- Contractor review - leading construction contractors in the schools, higher education and student accommodation sectors.
Key areas of insight include:
- Review of Government spending plans as announced in the 2014 Autumn Statement and 2015 March and June Budgets and a look forward to the forthcoming 2015 Spending Review.
- Overview of contractor and consortia capability and experience in primary, secondary and higher education construction work.
- Review of main procurement routes and construction programmes used in education construction work, including use of PF2 on PSBP.
- In-depth analysis of higher education construction market - focus on the impact of rising student numbers, higher tuition fees and cuts to capital budgets on university infrastructure and capital building programmes - student accommodation market, Enterprise Zones etc.
Some of the companies included:
Balfour Beatty, BAM, Bouygues UK, Bowmer & Kirkland, Carillion, Downing Developments, Galliford Try, Interserve, Kier, Laing O'Rourke, Morgan Sindall, Osborne, Sir Robert McAlpine, Wates, Watkin Jones, Willmott Dixon.
Primary, Secondary and Higher Education in the UK
- Types of Schools in the UK - mainstream and other State Schools, Independent schools.
- State education funding in the UK - DfE Spending, 2014 Autumn Statement, 2015 Budgets.
- Education budgets - Scotland, Wales and Northern Ireland.
- Overview and Structure of the UK HE sector, rise of the New Universities and the role of private providers.
- Factors impacting the HE sector - student growth, Applications, tuition fees rises and impact on student numbers.
- Higher education funding - sources of funding, HEFCE funding for England, HEFCW funding for Wales, SFC funding for Scotland.
- Endowment funds and bond markets in the HE sector.
Education Construction in the UK
- Total construction output - value of output construction new work to 2019 and construction output by sector.
- Contractors output in the education sector and output in the higher education sector Outlook for education construction work.
- Education capital spending - England, Scotland, Wales, Northern Ireland. 2011-2016 - key programmes.
- PFI in the education sector, use of PF2 in the education sector.
- Education capital building programmes - PSBP 1&2, Academies Programme, Free Schools, UTCs,
- Scotland's Schools for the Future Programme, Wales' 21st Century Schools. - Budgets, timing of programmes etc.
- MEFA Contractors Framework - funding Programmes - key authorities, contractors, budget values etc. EFA Regional Frameworks.
- PSBP Agreements - key issues, budgets.
- Scotland - Government Education major projects pipeline 2015-2018 - scheme, value, status etc.
- Capital expenditure in the Higher education sector - England, Scotland, Wales. - Budgets, Key Universities.
- University estates - size, capital spending and infrastructure backlog.
- University capital building programmes - teaching, research, University Technical Colleges, Enterprise Zones.
- Student Accommodation Sector - Types, Regional Provision, London Market, Commercial Providers of student accommodation (shares), investment funds, student accommodation development pipeline and market outlook.
Construction Supply in the Education Sector
- Leading Construction Contractors in the Schools Sector - Overview and contract experience and awards 2014-15.
- Leading Construction Contractors in the Higher Education Sector - Overview and contract experience and awards in 2014-15.
- Contractor experience in the Student Accommodation Sector.
- Procurement of projects in the Higher Education Sector.
Overall current, or day-to-day, school spending in England has been relatively protected over the past 5 years, compared with other areas of public service spending and other areas of education spending. Current spending on schools increased by 3% in real terms 2010-15. However, across the education sector, capital spending has been cut by over one third in real-terms which has had a negative impact on construction output in the sector.
The pupil population is expanding rapidly and overall pupil numbers are expected to grow by 7% 2016-20. This growth in pupil numbers will place additional pressures on both resource and capital budgets, which is expected to be more keenly felt in London and the South East. In addition, recently announced cuts of £900m to the DfE and BIS budgets announced in the 2015 Budget are likely to impact higher education and further education budgets and the administration of arms lengths bodies in the DfE.
Education construction output increased by around 19% in 2014, bringing it back to the same level as 2010, prior to the scrapping of the BSF programme. Increased output rates are being driven by ongoing investment in key building programmes including the PSBP and programmes to deliver new and refurbished facilities for the primary and secondary schools estate such as the Academies Programme. In addition, further education has also benefited from improvements and new facilities for FE colleges whilst the University Technical Colleges programme is likely to boost output growth into the medium-term, though universities remain a small market in terms of construction.
The key to the future of education output remains the rate of procurement and funding of key national building programmes and the continued use of PF2 to fund the programme. In the new build sector, the Government's Priority Schools Building Programme (PSBP) is expected to generate increased workloads in 2016 along with other major programmes in the schools sector. Investment is also increasing among UK universities as competition to attract overseas students intensifies and there is a particularly buoyant pipeline of ongoing new work at a number of universities as part of major long-term development programmes. Going into 2016 and beyond, the outlook for the student accommodation sector also remains positive, with student numbers expected to increase with the removal of the cap on student numbers, and the acute undersupply in many of the major university towns across the UK.
List of Report Contents
- Contents Listing
- 1. INTRODUCTION 8
- 1.1 BACKGROUND 8
- 1.2 SOURCES OF INFORMATION 8
- 2. SUMMARY AND FUTURE PROSPECTS 10
- 2.1 SUMMARY 10
- 2.2 FUTURE PROSPECTS 11
- 3. ECONOMIC ENVIRONMENT 13
- 3.1 GDP 13
- 3.2 INFLATION & INTEREST RATES 14
- 3.3 UNEMPLOYMENT 15
- 3.4 HOUSEHOLD CONSUMPTION 16
- 3.5 HOUSING & CONSTRUCTION 16
- 3.6 STERLING 17
- 3.7 POPULATION PROFILE 18
- 3.8 CONCLUSIONS 19
- 4. PRIMARY AND SECONDARY EDUCATION IN THE UK 20
- 4.1 TYPES OF SCHOOL IN THE UK 20
- 4.1.1 Mainstream State Schools 20
- 4.1.2 State Schools with Particular Characteristics 21
- 4.1.3 Independent Schools 22
- 4.2 STATE EDUCATION FUNDING IN THE UK 23
- 4.2.1 DfE Spending 23
- 4.2.2 Recent Education Spending Announcements 24
- 4.2.3 Education Budgets - Scotland, Wales & Northern Ireland 25
- 5. THE HIGHER EDUCATION SECTOR IN THE UK 27
- 5.1 OVERVIEW AND STRUCTURE 27
- 5.1.1 The 'New Universities' 27
- 5.2 THE ROLE OF PRIVATE PROVIDERS IN THE HIGHER EDUCATION SECTOR 28
- 5.3 STUDENT GROWTH 28
- 5.3.1 Applications 29
- 5.3.2 Tuition Fees 30
- 5.3.3 Impact of Tuition Fee Increases on Student Numbers 31
- 5.4 HIGHER EDUCATION FUNDING 32
- 5.4.1 Sources of Funding 32
- 5.4.2 HEFCE Funding for England 33
- 5.4.3 SFC Funding for Scotland 35
- 5.4.4 HEFCW Funding for Wales 37
- 5.5 ENDOWMENT FUNDS 38
- 5.5.1 Bond Markets 39
- 6. EDUCATION CONSTRUCTION IN THE UK 41
- 6.1 NON-RESIDENTIAL CONSTRUCTION OUTPUT 41
- 6.1.1 Non-Residential Construction Output by Sector 42
- 6.2 CONTRACTORS OUTPUT IN THE EDUCATION SECTOR 46
- 6.2.1 Output in the Higher Education Sector 47
- 6.2.2 Outlook for Education Construction Work 48
- 6.3 EDUCATION CAPITAL SPENDING 50
- 6.3.1 England 50
- 6.3.2 Scotland 51
- 6.3.3 Wales 52
- 6.3.4 Northern Ireland 53
- 6.4 EDUCATION CAPITAL BUILDING PROGRAMMES 53
- 6.4.1 PFI in the Education Sector 54
- 6.4.2 Priority Schools Building Programme (PSBP) 54
- 6.4.3 Academies Programme/Free Schools 61
- 6.4.4 Scotland - Schools for the Future Programme 64
- 6.4.5 Wales - 21st Century Schools Building Programme 68
- 6.5 CAPITAL EXPENDITURE IN THE HIGHER EDUCATION SECTOR 69
- 6.5.1 England 69
- 6.5.2 Scotland and Wales 70
- 6.5.3 University Estates 71
- 6.6 UNIVERSITY CAPITAL BUILDING PROGRAMMES 74
- 6.6.1 University Capital Plans 77
- 7. UNIVERSITY INFRASTRUCTURE - STUDENT ACCOMMODATION 80
- 7.1 TYPES OF STUDENT ACCOMMODATION 80
- 7.2 REGIONAL PROVISION OF STUDENT ACCOMMODATION 82
- 7.2.1 Student Accommodation Market in London 84
- 7.3 COMMERCIAL PROVIDERS OF STUDENT ACCOMMODATION 85
- 7.4 STUDENT ACCOMMODATION DEVELOPMENT PIPELINE 88
- 7.4.1 London Development Pipeline 89
- 7.4.2 Forecast UK Development Pipeline 89
- 7.5 OUTLOOK FOR THE STUDENT ACCOMMODATION MARKET 91
- 8. CONSTRUCTION SUPPLY IN THE EDUCATION SECTOR 93
- 8.1 LEADING CONSTRUCTION CONTRACTORS IN THE SCHOOLS SECTOR 93
- 8.1.1 Overview 93
- 8.1.2 Contractor Activity in 2014-2015 93
- 8.2 LEADING CONTRACTORS IN THE HIGHER EDUCATION SECTOR 96
- 8.2.1 Contractor Activity in 2014-15 96
- 8.2.2 Student Accommodation 97
- 8.2.3 Procurement of Projects in the HE Sector 97
- Tables & Charts
- TABLE 1 SUMMARY OF INVESTMENT AND MAJOR CAPITAL SPENDING PROGRAMMES IN THE PUBLIC EDUCATION SECTOR 2011-12 TO 2017-18 10
- TABLE 2 GDP DATA - 2012-2015 - KEY CONSTITUENT ELEMENTS 13
- CHART 3 INTEREST RATES AND INFLATION (CPI) FROM 2000-2019 15
- CHART 4 PDI & SAVINGS RATIO AT CURRENT PRICES 2000-2019 16
- TABLE 5 EXCHANGE RATE FLUCTUATIONS 2010-2016 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 18
- TABLE 6 EDUCATION ESTABLISHMENTS BY TYPE AND NUMBER - UK 2014 20
- TABLE 7 DFE SPENDING 2011/12-2015/16 MIX BY RESOURCES & CAPITAL (£BN) 24
- TABLE 8 EDUCATION SPENDING SCOTLAND 2012/13 TO 2015/16 RESOURCES & CAPITAL (£M) 25
- TABLE 9 EDUCATION SPENDING WALES 2012/13 TO 2015/16 RESOURCE & CAPITAL (£M) 26
- TABLE 10 EDUCATION SPENDING NORTHERN IRELAND 2012-13 TO 2015/16 RESOURCES & CAPITAL (£M) 26
- CHART 11 NUMBER OF APPLICANTS TO UK UNIVERSITIES BY DOMICILE GROUP 2011 TO 2015 29
- TABLE 12 ANNUAL TUITION FEES IN THE UK BY COUNTRY 2015 30
- CHART 13 UK HIGHER EDUCATION FINANCE MAIN SOURCES OF INCOME ACADEMIC YEAR 2013-14 32
- TABLE 14 HEFCE GRANT FOR FINANCIAL YEARS 2011-12 TO 2015-16 (£M) 33
- TABLE 15 HEFCE FUNDING 2015-16 - TOP 15 UNIVERSITIES BY SIZE OF GRANT 34
- TABLE 16 SFC GRANT FOR FINANCIAL YEARS 2011-12 TO 2015-16 (£M) 35
- TABLE 17 SFC SCOTLAND FUNDING ALLOCATION FOR TOP 15 UNIVERSITIES 2015-16 - BY VALUE (£M) 36
- TABLE 18 SFC SCOTLAND INDICATIVE RESEARCH EXCELLENCE GRANT - FUNDING BY UNIVERSITY 2016-2018 (£M) 37
- TABLE 19 TOP 15 UK UNIVERSITY ENDOWMENT FUNDS 2014-15 (£M) 39
- CHART 20 VALUE OF NON-RESIDENTIAL CONSTRUCTION OUTPUT 2010 TO 2019 BY VALUE (£BN AT CURRENT PRICES) 41
- CHART 21 NON-RESIDENTIAL CONSTRUCTION OUTPUT NEW WORK BY SECTOR - % BY VALUE 2014 42
- TABLE 22 CONTRACTORS OUTPUT FOR EDUCATION NEW WORK 2010 TO 2014 - BY VALUE £BN AT CURRENT PRICES 46
- TABLE 23 UK PUBLIC SECTOR EDUCATION OUTPUT - UNIVERSITIES AND TOTAL OUTPUT - BY VALUE £BN AT CURRENT PRICES 47
- CHART 24 EDUCATION CONSTRUCTION NEW WORK OUTPUT AND GROWTH FORECASTS 2010 TO 2019 - BY VALUE (£BN AT CURRENT PRICES) 49
- CHART 25 DEPARTMENT FOR EDUCATION CAPITAL EXPENDITURE 2009-2016 - BY VALUE (£BN) 51
- TABLE 26 EDUCATION CAPITAL SPENDING SCOTLAND 2012-2016(£M) 52
- TABLE 27 EDUCATION CAPITAL SPENDING WALES 2012-2016 (£M) 52
- TABLE 28 PSBP - EFA CONTRACTOR'S FRAMEWORK NORTHERN GEOGRAPHICAL AREA 56
- TABLE 29 PSBP - EFA CONTRACTOR'S FRAMEWORK BY SOUTHERN GEOGRAPHICAL AREA 57
- TABLE 30 PSBP - EFA REGIONAL FRAMEWORK FOR SCHOOL BUILDING BY REGION 58
- TABLE 31 PSBP - STATUS OF 5 BATCHES USING PF2 59
- TABLE 32 SCOTLAND SCHOOLS FOR THE FUTURE PROGRAMME - SELECTED SCHOOLS (REFURBISHMENT AND NEW BUILD) 65
- TABLE 33 SCOTTISH GOVERNMENT EDUCATION FORWARD PIPELINE - CAPITAL FUNDED SCHOOLS AND COLLEGES PROJECTS 2015-2018 66
- TABLE 34 SCOTTISH GOVERNMENT EDUCATION FORWARD PIPELINE - REVENUE FUNDED PROJECTS UNDER CONSTRUCTION OR IN DEVELOPMENT 2015-2018 67
- TABLE 35 TOP CAPITAL ALLOCATIONS TO HIGHER EDUCATION INSTITUTIONS 2015-16 (£M) 70
- TABLE 36 SFC SCOTLAND CAPITAL FUNDING TOP 15 UNIVERSITIES 2015-16 (£M) 71
- TABLE 37 ESTATE MANAGEMENT DATA BY INSTITUTION - CAPITAL EXPENDITURE ON RESIDENTIAL ESTATE 2013-14 (£M) 73
- TABLE 38 UNIVERSITY ENTERPRISE ZONES IN THE UK - SUMMARY 76
- CHART 39 TYPES OF STUDENT ACCOMMODATION IN THE UK - APPROXIMATE SHARE BY TYPE 2014-15 81
- TABLE 40 REGIONAL PROVISION OF STUDENT ACCOMMODATION AT MAJOR UK UNIVERSITIES 2015 83
- TABLE 41 MARKET SHARES OF LEADING COMMERCIAL OPERATORS OF STUDENT ACCOMMODATION IN THE UK 2014-15 86
- CHART 42 FORWARD PIPELINE OF STUDENT BED-SPACES BY OPERATOR 2015/16-2018/19 88
- CHART 43 ESTIMATED NUMBER OF NEW STUDENT BED SPACES BUILT PER YEAR - 2009-2019 90
- TABLE 44 SCHOOLS SECTOR ANALYSIS - TOP CONTRACTORS BY VALUE OF PROJECTS (£M) 2014-15 95
- TABLE 45 UNIVERSITIES SECTOR ANALYSIS TOP CONTRACTORS 2014-15 - PROJECTS VALUED AT £100M+ 99
- TABLE 46 UNIVERSITIES SECTOR ANALYSIS TOP CONTRACTORS 2014-15 - PROJECTS UNDER £100M AND OTHER CONTRACTORS 100
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