AMA Research on Education Construction Market

Keep up to date with the latest market information from AMA Research Report of the Month: Education Construction Market - UK 2009-2013

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 GBP21.9 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 GBP1 billion of investment to enable thousands of school projects to be started in the next 12 months.

Going forward, the GBP45bn 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 GBP4bn 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.

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 GBP7-9 billion over its lifetime and around GBP1.9billion 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 GBP200m before next April to help get GBP280m 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 GBP100 billion being spent from now until 2020 and the largest proportion is being spent across London and the South East.

BSF accounts for GBP9bn of the GBP22bn 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.

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