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Wed June 23 2021

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HS2 generates spike in government construction pipeline

19 May 16 Analysis by KPMG has revealed a £62.6bn jump in the value of the UK Government construction pipeline since August 2015.

KPMG construction wonk Richard Threlfall
KPMG construction wonk Richard Threlfall

The accountants attribute the spike to the inclusion of the full cost of HS2 to Birmingham, Leeds and Manchester, and additional spending on education and nuclear decommissioning.

The report, UK Government Construction Pipeline - KPMG Analysis, lists £181bn of spending on government funded projects, increased from £119bn in August 2015.

Changes in the pipeline include:

  • An increase of £32bn in the transport sector attributable to inclusion of the Spending Review 2015 budget for HS2 Phases 1 and 2
  • An additional £15bn in the education sector due to an increased balance of spend as identified in ‘Investing in Britain’s Future’
  • A £10bn increase in the value of the energy sector pipeline attributable to additional spend on nuclear decommissioning.

Of the 15 sectors covered in the report, 84% of the pipeline value comprises projects in transport (£92.2bn), energy (£32.3bn) and education (£27.9bn).

A further 15% comes from Ministry of Defence (£6.9bn), science & research (£6.9bn), flood defences (£4.9bn), health (£4.3bn), justice (£1.8bn), housing & regeneration (£1.4bn) and police (£1.3bn).

Waste, further education, the Coal Authority, the Home Office and Culture/Media/Sport each represent less than £1bn in project value.

Richard Threlfall, KPMG’s UK head of infrastructure, building and construction, said: “It is encouraging to see the dramatic increase in forecast spending resulting from the government including the full budget for HS2 phases 1 and 2 in the pipeline. The focus now needs to be on efficient delivery to ensure that projects are delivered to time and budget.”

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