The Competition and Markets Authority (CMA) has launched a new market study into the design, planning and delivery of road and railway infrastructure across the country. This is an important time for the sector as the government sets out its long-term plan for the country’s infrastructure and undertakes legislative reforms. 

This is the first market study the CMA has launched since the publication of the government’s strategic steer for the CMA. It will be run in line with the CMA’s ‘4Ps’ commitment to pace, predictability, proportionality and enhanced process to deliver more effective engagement with key stakeholders. 

The market study will examine whether there are opportunities to improve how the public sector and industry work together, for example through improvements to public procurement, so more cost-effective infrastructure can be built in support of the government’s growth mission. The market study is likely to result in recommendations to government and does not give the CMA the power directly to intervene in the market. 

The civil engineering sector as a whole added £23 billion to the UK economy in 2023. This study could help boost productivity, streamline procurement and reduce barriers to entry across the sector. It could also create a multiplier effect on growth through wider businesses activity such as improving access to jobs and reducing the costs of moving goods.  

The National Infrastructure Commission estimated that public and private sector investment will need to increase by 30% - 50% over the next decade to deliver more complex infrastructure. However, it highlighted that the sector is not currently operating well and making system-wide improvements could result in savings of 10% - 25% across infrastructure projects. 

Road and railway projects account for around 70 - 75% of government spending on economic infrastructure, which refers to services built to help the economy work such as highways and power lines. Building on evidence collected so far, the review will focus on: 

The CMA is well-placed to look at this market across the UK, including taking account of different national and regional perspectives, to form a holistic and impartial view about how the market operates and to make clear, focused recommendations to drive improvements. This draws on its rigorous, evidence-based processes; collaboration with all players in the market; and expertise on developing positive steps to improve competition and markets. 

Sarah Cardell, Chief Executive at the Competition and Markets Authority, said: 

There’s no question that reliable, high-quality infrastructure is critical in accelerating economic growth. To achieve this, public authorities and the civil engineering sector must be able to work together to deliver projects on time, within budget and to high standards. 

This review is a crucial step in identifying barriers holding back the sector - supporting the drive to get Britain building and ensuring every penny spent is delivering value for taxpayers.

The CMA would like to hear from businesses such as those designing infrastructure projects or working across the supply chain. It will conduct the study in line with the CMA’s ‘4Ps’ commitments to pace, predictability, proportionality and process (in particular stakeholder engagement). This includes: 

Chief Secretary to the Treasury, Darren Jones, said: 

Upgrading the country’s economic infrastructure is essential for unlocking growth across the country and delivering our Plan for Change.  

This study will build on our 10-year infrastructure strategy and help us deliver growth with its evidence-based, independent findings.

The market study will focus on the full life cycle of roads and railways, including their enhancement and maintenance. It will not consider privately procured roads or smaller maintenance activities like potholes. It also excludes HS2 given it has undergone multiple reviews. 

Alasdair Reisner, Chief Executive at the Civil Engineering Contractors Association, said: 

Civil engineering plays a vital role in all our lives, from the largest megaprojects to the smallest local schemes. But in all cases, we must strive to work with our clients to deliver outstanding and affordable results.  

We welcome the CMA’s focus on how more productive delivery of civil engineering can secure better outcomes and help the government meet its ambitions for growth. We look forward to working to support this study.

Once the CMA has carried out the necessary analysis, it will consider potential options for improving how the market operates and expects to publish an interim report setting out initial findings in November.