Education Construction Market - UK 2009-2013
AMA Research, July 2009, Pages: 87
The 3rd Edition of the report “Education Construction Market – UK 2009-2013”, focuses on key market trends, structure and change within the primary, secondary and higher education sectors, major education contractors and procurement issues.
Over £20 billion will be invested in the next 3 years, with a new tender notice for £4 bn of work recently announced and the Government regarding education as a primary vehicle for supporting the construction industry through this particularly difficult period.
Key areas in the report:
- Procurement of education work by local authorities and universities
- Analysis of the Government’s major school building programmes including Building Schools for the Future, the Academies Programme and the Primary Capital Programme
- Detailed analysis of capital investment in the education system, an update of construction progress and an assessment of contractors output of work in the education market
- Recent funding programme changes – accelerated funding plans, procurement processes
- Consortia members – design, construction, Facilities Management.
- Areas of particular interest:
- The Government is investing £21.9 billion of capital into the school estate between 2008 and 2011 as part of the Comprehensive Spending Review (CSR).
- New tender notice for £4 billion of work in Academies sector.
- Analysis of major supply chains including principal consortia formed to bid for education work
In the light of the current economic downturn, the Report also reviews the impact of the ‘credit crunch’ on the forecast capital investment in the primary and secondary education sectors and the anticipated effects on the success of the Government’s school building capital programmes
Detailed analysis of capital investment levels in the higher education sector - major building programmes at UK universities, student accommodation etc.
Key drivers and future prospects for the education contracting market - future of BSF (prospects / risks), impact of recession, Govt. actions etc
Contractors included:
Allenbuild, Balfour Beatty , Bovis Lend Lease, Carillion, Costain, Cowlin Construction Ltd, Fsquared Ltd, HBG Construction Ltd, Innisfree, Interserve Project Services, Kier, Laing O’Rourke, Leadbitter, Miller Construction, Morgan Ashurst, Nord Anglia Education Plc, Ocon Construction, Opal Property Group, Shepherd Construction, Wates, Willmott Dixon.
Key areas of coverage in the report include:
PRIMARY & SECONDARY EDUCATION IN THE UK
- Structure of the state education system in England, Scotland, Wales and Northern Ireland including types of schools in operation – also overview of the Independent Schools Sector.
- State education funding in the UK, including total education spending and DCSF budgets including the early release of funds announced in the Pre-Budget Report 2008.
- Analysis of DCSF expenditure by function.
THE HIGHER EDUCATION SECTOR IN THE UK
- Structure and size of the higher education sector in the UK - Impact of new universities on infrastructure developments within the sector.
- Key sector drivers including rising student numbers and the impact of tuition fees.
- Sources of higher education funding and allocations by the major funding councils in England, Scotland and Wales.
EDUCATION SECTOR BUILDING PROGRAMMES
- Value of construction new work output - output by sector in 2008 – and forecasts for 2009 and beyond.
- Analysis of contractors output in the public education sector - outlook for education construction work.
- Capital expenditure in the schools sector and types of capital funding.
- PFI in the education sector including an in-depth analysis and update of progress under the Building Schools for the Future programme. Review of Waves 1-6 and 7-15 – leading framework contractors/principal consortia members. Future prospects for the programme.
- Academics programme – March 2009 £4 billion framework – scale and timing of programme. Key framework contractors.
- Prospects for the recently announced Primary Capital programme for the rebuilding & refurbishment of primary schools – less reliant on PFI funding and possibly more robust programme. Budgets, scale and timing of programme 2008-12.
- Capital Acceleration package announced in Spring 2009 – allocation of funds – top 20 LAs to receive funding.
- Capital expenditure in the higher education sector including the early release of funds announced in the Pre-Budget Report 2008.
- University capital building programmes and developments in the student accommodation sector – key market sectors.
- Review of procurement processes – LEP model, frameworks, key influencers etc.
CONTRACTOR PROFILES
- Key construction companies and contractors.
- Private sector consortia in education – design, construction, FM members. Framework consultants.
- Contractor profiles – key contractors operating in the education market.
1. INTRODUCTION
2. EXECUTIVE SUMMARY AND FUTURE PROSPECTS
3. PRIMARY & SECONDARY EDUCATION IN THE UK
3.1 STRUCTURE OF THE STATE EDUCATION SECTOR
3.1.1 England and Wales
3.1.2 Scotland
3.1.3 Northern Ireland
3.2 TYPES OF SCHOOL IN THE UK
3.2.1 Maintained
3.2.2 City Technology Colleges
3.2.3 Academies
3.2.4 Other Types of Schools
3.2.5 UK Independent Schools Sector
3.3 STATE EDUCATION FUNDING IN THE UK
3.3.1 Total Education Spending
3.3.2 DCSF Funding
3.3.3 Spending by Function
4. THE HIGHER EDUCATION SECTOR IN THE UK
4.1 OVERVIEW & STRUCTURE
4.1.1 Impact of the ‘New Universities’ on Infrastructure Development
4.1.2 Student Growth
4.1.3 Tuition Fees
4.2 HIGHER EDUCATION FUNDING
4.2.1 Sources of Funding
4.2.2 Funding Councils
4.2.3 Endowment Funds
5. CONTRACTORS OUTPUT IN THE UK EDUCATION SECTOR
5.1 TOTAL CONSTRUCTION OUTPUT
5.1.1 Value of Output - Construction New Work
5.1.2 Construction Output by Sector
5.1.3 Construction Output in 2009 and Beyond
5.2 CONTRACTORS OUTPUT IN THE EDUCATION SECTOR
5.2.1 Outlook for Education Construction Work
5.3 CAPITAL EXPENDITURE IN THE SCHOOLS SECTOR
5.3.1 England
5.3.2 Early Release of DSCF Funding – March 2009
5.3.3 Scotland
5.3.4 Wales
5.3.5 N. Ireland
5.4 PFI IN THE EDUCATION SECTOR
5.5 BUILDING SCHOOLS FOR THE FUTURE PROGRAMME
5.5.1 Background & Overview
5.5.2 Investment in BSF
5.5.3 How BSF Works
5.5.4 Scheme Update/Progress to Date
5.5.5 BSF Issues
5.5.6 Procurement under BSF
5.5.7 BSF Clients/Consortia
5.5.8 Future of BSF
5.6 ACADEMIES PROGRAMME
5.6.1 Programme Overview & Progress to date
5.6.2 Academies Framework 2010
5.6.3 Academies Consortia
5.7 PRIMARY CAPITAL PROGRAMME
5.7.1 Overview
5.7.2 PCP Funding
5.7.3 Roll Out of the Programme
5.7.4 PCP Procurement
5.8 CAPITAL EXPENDITURE IN THE HIGHER EDUCATION SECTOR
5.8.1 Capital Expenditure Levels
5.8.2 Early Release of Capital Funds for Higher Education
5.8.3 University Estates
5.8.4 University Capital Building Programme
5.9 UNIVERSITY INFRASTRUCTURE – STUDENT ACCOMMODATION
5.9.1 Types of Student Accommodation
5.9.2 Commercial Student Accommodation Sector
6. CONTRACTOR PROFILES
6.1 STRUCTURE AND SIZE OF THE CONTRACTING INDUSTRY
6.2 KEY CONSTRUCTION COMPANIES AND CONTACTORS
6.3 PRIVATE SECTOR CONSORTIA IN THE EDUCATION SECTOR
6.4 KEY EDUCATION CONTRACTOR PROFILES
STATISTICS
TABLE 1: SUMMARY OF MAJOR CAPITAL SPENDING PROGRAMMES IN THE PUBLIC EDUCATION SECTOR 2006-2011
TABLE 2: EDUCATION SYSTEM IN ENGLAND – STATE AND PRIVATE – BY AGE GROUP
TABLE 3: EDUCATION ESTABLISHMENTS BY TYPE AND NUMBER - UK 2008
CHART 4: VALUE OF TOTAL UK EDUCATION EXPENDITURE 2004-2011 (£ BILLION)
TABLE 5: DCSF SPENDING 2006 – 2011 – MIX BY RESOURCES & CAPITAL (£ BILLION)
TABLE 6: UK EDUCATION SPENDING BY SECTOR – SERVICES AND CAPITAL - 2005 – 2008 (£M)
TABLE 7: INFRASTRUCTURE PLANS OF NEWLY FORMED UNIVERSITIES – CAPITAL SPEND AND CONSTRUCTION PLANS
TABLE 8: NUMBER OF STUDENTS IN HIGHER EDUCATION IN THE UK 2000-2010
TABLE 9: HE FUNDING BODIES BY REGION – TOTAL BUDGET AND CAPITAL BUDGETS 2009-10
CHART 10: HEFCE GRANT 2009-10 BY FUNDING STREAM
TABLE 11: HEFCE ENGLAND FUNDING 2009-10 – TOP 10 UNIVERSITIES
TABLE 12: SFC SCOTLAND FUNDING 2009-10 – TOP 10 UNIVERSITIES
TABLE 13: HEFCW FUNDING 2009-10 – TOP 5 UNIVERSITIES
TABLE 14: IMPACT OF THE ECONOMIC DOWNTURN ON UNIVERSITY ENDOWMENT FUNDS
CHART 15: VALUE OF CONSTRUCTION OUTPUT NEW WORK 2002-2013 (£ BILLION)
CHART 16: VALUE OF CONSTRUCTION OUTPUT NEW WORK BY SECTOR - % BY VALUE 2008
TABLE 17: CONTRACTORS OUTPUT OF EDUCATION SECTOR WORK (PUBLIC/PRIVATE) 1998-2008 (£M)
TABLE 18: SUMMARY INFORMATION - PUBLIC SECTOR SCHOOLS FUNDING 2008-11 – BY SECTOR, PROGRAMME AND VALUE
CHART 19: SCHOOL BUILDINGS CAPITAL EXPENDITURE 2007-2011 (£ BILLION)
TABLE 20: CAPITAL FUNDING STREAMS - ALLOCATION FOR SCHOOLS: 2008-09 TO 2010-11 (£M)
TABLE 21: EDUCATION CAPITAL ACCELERATION PACKAGE – MARCH 2009
TABLE 22: LA BREAKDOWNS - SCHOOLS CAPITAL ALLOCATIONS ACCELERATED FROM 2010-11 TO 2009-10 – TOP 20 ALLOCATIONS
TABLE 23: FINANCIAL ALLOCATIONS UNDER BSF: CONVENTIONAL / PFI MIX 2005-2011 (£BN)
TABLE 24: SCHOOL NEW BUILD, RENEWAL & REFURBISHMENT UNDER BSF
TABLE 25: BSF SCHOOL OPENINGS: 2008-12
TABLE 26: BSF PROGRESS (AS AT DECEMBER 2008) – SCHOOLS PROGRAMME, LOCAL AUTHORITIES AND PROGRESS STATUS
TABLE 27: BSF WAVES 7-15 – PROJECT STATUS / NO. OF AUTHORITIES
TABLE 28: LEADING BSF CONTRACTORS AND PRINCIPAL CONSORTIA MEMBERS (DESIGN, CONSTRUCTION, FM)
TABLE 29: PRIMARY CAPITAL PROGRAMME – FUNDING 2008 – 2012 (£M)
TABLE 30: PRIMARY CAPITAL PROGRAMME - COUNCILS WITH FUNDING CONFIRMED FOR 2009/10 AND 2010/11
TABLE 31: TOP 10 CAPITAL ALLOCATIONS TO HIGHER EDUCATION INSTITUTIONS 2008-11 (£M)
TABLE 32: HIGHER EDUCATION ESTATE – TOTAL AREA BY SECTOR 2006-07
TABLE 33: UK TOP 10 UNIVERSITY CLIENTS BY CAPITAL EXPENDITURE, PROCUREMENT ROUTE AND CAPITAL ALLOCATION 2008-11 (£M)
CHART 34: TYPES OF STUDENT ACCOMMODATION IN THE UK – APPROXIMATE SHARE BY SECTOR 2008
TABLE 35: MARKET SHARES OF LEADING COMMERCIAL OPERATORS OF STUDENT ACCOMMODATION IN THE UK 2008
CHART 36: ESTIMATED NUMBER OF NEW STUDENT BED SPACES BUILT PER YEAR - 2002-2012
TABLE 37: MAIN PRIVATE CONTRACTORS - BY NUMBER OF EMPLOYEES 2007
TABLE 38: UK’S TOP 20 CONTRACTORS BY GROUP TURNOVER 2007/2008
TABLE 39: LEADING EDUCATION CONTRACTORS AND PRINCIPAL CONSORTIA
TABLE 40: KEY CONTRACTORS IN THE EDUCATION SECTOR – SECTOR STRENGTHS & KEY PROJECTS
Over the last 12 years, capital expenditure on school buildings has risen from under £700 million in 1996-97 to £6.7 billion in 2008-09 and will rise to over £8 billion in 2010-11. A number of capital building programmes in the education sector are now well underway including the Building Schools for the Future (BSF) Programme, the Academies Programme and the recently announced Primary Capital Programme to rebuild and refurbish 50% of primary schools.
The Government is investing £21.9 billion of capital into the school estate between 2008 and 2011 as part of the Comprehensive Spending Review (CSR) 2007. In March 2009, the Government also announced that it was accelerating almost £1 billion of investment to enable thousands of school projects to be started in the next 12 months. Around £919 million has been brought forward, which means that overall schools capital spending in 2009-10 will now be around £8 billion – up from under £700m a year in 1997.
Going forward, the £45bn Building Schools for the Future (BSF) Programme, which is scheduled to run until 2020 will be of particular interest to new entrants because Partnerships for Schools, the body responsible for delivering the programme, has just released a tender notice for a new £4bn framework that will give up to 12 contractors a chance to win academies work under the scheme.
The National Framework for Academies could be another major source of new work in the schools sector. Currently more than half of new academy build projects are being procured through frameworks, with the remainder being delivered through Local Education Partnerships.
The Primary Capital Programme, which aims to rebuild or refurbish 50% of England’s 17,000 primary schools over 15 years, is also being launched in 2009 and will see a total investment of £7-9 billion over its lifetime and around £1.9billion until 2011.
Universities are also being urged by the government to bring forward spending plans to provide an impetus to the construction industry during the economic downturn. The Higher Education Funding Council for England is advancing £200m before next April to help get £280m worth of projects off the ground.
The current economic climate is providing an opportunity for the student accommodation sector to meet the need for accommodation through joint university and private sector development and take advantage of falling site prices and declining construction costs.
The Government’s capital programmes for primary and secondary schools have had a huge impact on education spending in the UK with an estimated £100 billion being spent from now until 2020 and the largest proportion is being spent across London and the South East. BSF accounts for £9bn of the £22bn being spent on education construction in this spending review period, which runs until April 2011.
In the short and medium-term it is the availability of funding that will be the key driver in the viability of both schools and higher education building programmes. However, the long-term nature and prevalence of large projects in BSF, the Academies Programme and the Primary Capital Programme should help boost education construction activity and help counteract output falls in the commercial and private residential sectors.
The Government is investing £21.9 billion of capital into the school estate between 2008 and 2011 as part of the Comprehensive Spending Review (CSR) 2007. In March 2009, the Government also announced that it was accelerating almost £1billion of investment to enable thousands of school projects to be started in the next 12 months.Around £919 million has been brought forward, which means that overall schools capital spending in 2009-10 will now be £7.943 billion – up from under £700m a year in 1997.
Going forward, the £45bn Building Schools for the Future (BSF) Programme, which is scheduled to run until 2020 will be of particular interest to new entrants because Partnerships for Schools, the body responsible for delivering the programme, has just released a tender notice for a new £4bn framework that will give up to 12 contractors a chance to win academies work under the scheme.
The National Framework for Academies could be another major source of new work in the schools sector. Currently more than half of new academy build projects are being procured through frameworks, with the remainder being delivered through Local Education Partnerships.
The Primary Capital Programme, which aims to rebuild or refurbish 50% of England’s 17,000 primary schools over 15 years, is also being launched in 2009 and will see a total investment of between £7-9billion over its lifetime and around £1.9billion until 2011
Universities are also being urged by the government to bring forward spending plans to provide an impetus to the construction industry during the economic downturn. The Higher Education Funding Council for England is advancing £200m before next April to help get £280m worth of projects off the ground.
The current economic climate is providing an opportunity for the student accommodation sector to meet the need for accommodation through joint university and private sector development and take advantage of falling site prices and declining construction costs.
The Government’s capital programmes for primary and secondary schools have had a huge impact on education spending in the UK with an estimated £100 billion being spent from now until 2020 and the largest proportion is being spent across London and the South East. BSF accounts for £9bn of the £22bn being spent on education construction in this spending review period, which runs until April 2011.
In the short and medium-term it is the availability of funding that will be the key driver in the viability of both schools and higher education building programmes. However, the long-term nature and prevalence of large projects in BSF, the Academies Programme and the Primary Capital Programme should help boost education construction activity and help counteract output falls in the commercial and private residential sectors.
- Allenbuild
- Balfour Beatty
- Bovis Lend Lease
- Carillion
- Costain
- Cowlin Construction Ltd
- Fsquared Ltd
- HBG Construction Ltd
- Innisfree
- Interserve Project Services
- Kier
- Laing O’Rourke
- Leadbitter
- Miller Construction
- Morgan Ashurst
- Nord Anglia Education Plc
- Ocon Construction
- Opal Property Group
- Shepherd Construction
- Wates
- Willmott Dixon
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