The Competition & Markets Authority (CMA) has published an interim report on its civil engineering market study setting out its emerging findings and possible remedies.
Broadly, it has concluded that weaknesses in the UK civil engineering market all stem from poor procurement.
And there are certainly weaknesses: Boston Consulting Group analysis shows that of 48 UK road projects, 58% finished late, with an average overrun of 29% when delays occurred; 聽of 27 rail projects, 56% finished late, with an average overrun of 27% when delays occurred.
The government tasked the CMA in June 2025 with exploring the rail and road civil engineering market to see how things might be done better. 聽The commission was illustrative of the new direction that the government wants to pint the competition watchdog in: less focused on catching out cartels and collusion, and more concerned with promoting the government鈥檚 economic growth mission.
The CMA鈥檚 civil engineering market study follows, and builds on, the work of other bodies 鈥� including the National Infrastructure & Service Transformation Authority, which was created in April this year by merging the National Infrastructure Commission (NIC) and the Infrastructure & Projects Authority (IPA). Both organisations have published their own reports on infrastructure costs, planning and delivery.
In its interim report, the CMA says that the UK鈥檚 civil engineering market for public roads and railways is caught in a negative cycle 鈥� one that is holding back the sector鈥檚 ability to support UK growth and productivity.
The report says: 鈥淏ased on our work so far, our provisional view is that the market is caught in a negative cycle, with constrained participants subject to the wrong incentives. This in turn is leading to poor outcomes including that:
- costs are higher than they should be;
- project overruns are common; and
- investment in new approaches is lower than it could be.
鈥淥n the demand side, at both a national and local level, public authorities that procure infrastructure projects often choose procurement and contracting options which are low-risk and low-cost for them, and may not be able to invest sufficiently in getting the early stages of projects right, even though these approaches may lead to worse outcomes in the delivery phase, or miss opportunities to drive longer-term improvements. In this way, they may miss an opportunity to shape this market effectively, and indeed they may lack the resources, incentives and certainty over future funding and political priorities to do so effectively.
鈥淥n the supply side, firms have adapted to this environment. Throughout the supply chain, firms lack sufficient incentives to invest and innovate and face high administrative costs. Firms may also face barriers to being able to enter the market and to expand, for example as a result of complex procurement processes, which can weaken competitive intensity. In addition, there are a large number of firms operating in the market with significant reliance on subcontracting arrangements, which can introduce extra cost and complexity if not used appropriately.鈥�
It adds: 鈥淎t this stage, the CMA considers the root causes of these issues to include: uncertain and short-term funding, a risk-averse culture, and regulatory barriers to entry and growth, amongst other factors,鈥� it says.
The CMA has provisionally identified several options for improvements including in relation to pipeline uncertainty, public procurement policy, capacity constraints and regulatory barriers. These options will be further tested and developed in the remainder of the study, with a final report expected next spring.
For the remainder of the study the CMA said that it will focus on:
- 聽聽聽 Exploring ways to create a more stable and predictable funding environment, enabling authorities and suppliers to plan and invest for the long term.
- 聽聽聽 Considering how to strengthen procurement capability across public bodies, ensuring the right skills and expertise are in place to deliver effective contracts.
- 聽聽聽 Looking at approaches to encourage a more balanced approach to risk, so that procurement practices reward innovation and performance rather than caution.
- 聽聽聽 Examining opportunities to streamline regulatory processes and accreditations to reduce unnecessary costs and delays, making it easier for firms 鈥� especially smaller ones 鈥� to enter and grow.
- 聽聽聽 Identifying ways to foster greater collaboration and consistency across government, public authorities, and industry to drive efficiency and value for money.
CMA chief executive Sarah Cardell said: 鈥淭ransport is vital to the UK economy and the prosperity of households across the country. Civil engineering is key to making sure this network operates effectively 鈥� and a well-functioning market helps boost growth and productivity by improving connectivity for businesses and people across the UK.
鈥淭he CMA is committed to stepping up its role as an enabler of competition. Building on the work of other expert bodies in this field, we鈥檙e focused on identifying concrete ways to deliver better outcomes in these critical infrastructure markets. Early areas of focus include enhanced competition and innovation in supply chains, through greater opportunities for scaling and removal of regulatory barriers 鈥� and more effective public procurement processes. At the same time, we want to enable legitimate collaboration 鈥� across government, public authorities and industry 鈥� to support investment and growth.
鈥淲e鈥檒l continue our work to develop and refine our initial proposals into a mutually reinforcing package of measures, engaging further with the sector as we do so.鈥�
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