KPMG’s report, UK Government Construction Pipeline, indicates that there is a total decrease of 886 construction and infrastructure projects since its previous pipeline analysis in December 2014.
The number of projects lined up by all the various government departments has decreased by 28% this year from 3,148 to 2,262 in August 2015.
The decline is partly due to projects being completed but mostly, according to KPMG, it is down to projects being quietly deleted from government lists in the expectation that they will be axed anyway in the forthcoming spending review.
There is a £6.7bn decrease in Transport projects in the pipeline. This relates to spend already incurred on ongoing programmes, including Crossrail.
There is also a £2.8bn decrease in Housing and Regeneration projects – relating to the completion of Decent Homes Backlog projects and a number of Affordable Housing projects and programmes also completed.
KPMG’s analysis also found that 1,784 of the listed projects have not specified construction start date.
Most of the pipeline shrinkage is in the Defence, Justice and Police sectors – 860 projects alone relate to these sectors. However, projects in this sector are mostly small scale works. Defence, Justice and Police Forces projects account for more than 74% of projects (1,672) by volume, but only 10% (£11.4bn) of total allocated spend. By contrast, transport and energy account for nearly 70% of spend (£82.1bn) but only 9% of the projects by volume.
Richard Threlfall, KPMG’s UK head of infrastructure, building and construction, said: “It is clear that more needs to be done to improve the consistency and accuracy of the government’s construction pipeline. A stable pipeline would give the construction industry good visibility of future demand and the ability to plan and invest for that demand. It would lead to efficiencies for the government and hence for the taxpayer. Instead we have a pipeline whose data is so incomplete, and which fluctuates so wildly and erratically that the industry can place no detailed reliance on it.
“I hope that we will get a clearer picture in November when the spending review is published. But in the meantime the huge 28% drop in the number of projects included suggests some government departments are putting projects on hold in the expectation that they get culled. I don’t expect we will see anything like the scale of cutback in capital programmes that the industry experienced in 2010, after the last election, but there is clearly cause for nervousness about the potential squeeze in spending.
“I hope the government will recognise that what this industry most needs is long-term certainty and stability in demand, to provide it with the confidence to invest in technology and its workforce. Our growing economy is creating a welcome uplift in private sector demand, but the government should not use that as an excuse to cut back its own investments, create another hiatus, and send ripples of uncertainty through the industry.”
|
August 2015 |
December 14 |
|
|
Total 2015 to 2017 |
£ 36.9 bn |
£ 37.8 bn |
|
2017 to 2020 Estimated |
£ 41.5 bn |
£ 50.2 bn |
|
Beyond 2020 Estimated |
£ 40.3 bn |
£ 39.7 bn |
|
Total Allocated Value |
£ 118.7 bn |
£ 127.8 bn |
|
Total Number of Projects |
2,262 |
3,148 |
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