The Competition and Markets Authority (CMA) has published the findings of its market study into road and rail infrastructure and is recommending concrete actions to drive down costs and drive up innovation and productivity.

CMA said that following 11 months of in-depth analysis and engagement with Government, procuring authorities and businesses, its market study on public road and rail infrastructure highlighted “the cost of historic approaches, and the scale of the opportunity for reform.”

Now, it is recommending Government embraces a more strategic and coordinated approach to delivering road and rail infrastructure with a clear plan for the sector. Alongside recommending concrete actions in road and rail, the CMA said it believed that the lessons learned have broader applicability across public infrastructure procurement.

Sarah Cardell, Chief Executive of the CMA, said: “Our work on civil engineering shows that a short term and fragmented approach to procurement in road and rail is driving up costs, slowing delivery and holding back innovation.

“This is an opportunity for systemic change – but it requires strong central coordination, and a reframing of road and rail procurement as a lever for growth and innovation. The CMA will continue to play its part, bringing independent advice, analysis and practical solutions to drive economic growth.”

Civil engineering shows the cost of getting procurement wrong

CMA said that around £19 billion of taxpayers’ money was spent on public road and railway infrastructure in 2023/24 (excluding High Speed 2). It added that these markets had “long underdelivered on productivity, innovation and the speed of delivery”. The CMA’s market study reportedly identifies the key drivers – funding uncertainty, short-term decision making, complex regulation and capability gaps – and proposes concrete steps to address them.

The CMA added that external research, highlighted in its report, showed UK and devolved Governments could potentially save up to £5 billion a year by addressing the challenges in the market, while also reducing delivery times, increasing innovation and investment, and supporting UK firms to grow and compete.

A clear agenda for reform

Key recommendations from the CMA’s targeted package of reforms in public road and rail civil engineering include:

The CMA said that taken together, these changes would strengthen competition in the sector, increasing productivity and opportunities for UK scaleups. It added that they would speed up delivery and help ensure public investment “worked harder for the economy.” Applied more systemically, the CMA believes they could help public procurement become a major driver of growth.

The organisation said it “stood ready” to support the UK and devolved governments in implementing the recommendations. At the same time, the CMA’s broader work on public procurement across priority sectors of the industrial strategy continues, as do its efforts to tackle public sector bid rigging.

Sam Gould, Director of Policy and External Affairs at the Institution of Civil Engineers, said: “The recommendations in today’s CMA study align with many the ICE has championed. We’re particularly happy to see the CMA recommend mandatory use of the Construction Playbook. This will help enable faster infrastructure delivery. We’re also glad the CMA has echoed the ICE in saying that the Treasury should oversee driving system-wide change, with the support of NISTA.

“While the current recommendations only apply to rail and road, embedding them could provide useful insight and lessons for other sectors. The government should consider applying them more broadly. Now the government must accept and enact the recommendations so civil engineers and infrastructure professionals can get on with delivering the infrastructure the UK needs.”

Ben Goodwin, Director of Policy and Public Affairs for the Civil Engineering Contractors Association, said: “By calling for the UK and devolved governments to set a strategic direction for infrastructure, the CMA’s recommendations show a clear path towards greater pipeline visibility, more efficient procurement, and better outcomes for businesses, communities, and the wider economy.

“We strongly support the CMA’s conclusion that reforming the civil engineering market can deliver a powerful multiplier effect: improving value for money from public investment, strengthening supply chain confidence, and making the UK a more attractive place to invest.

“We look forward to working with our members, clients, and industry stakeholders to ensure this report acts as a catalyst for the reform that is needed – supporting growth, creating jobs, and delivering world-class infrastructure for the 21st century.”

Next steps

Recommendations have been made to the UK and devolved Governments, with the CMA writing to key Cabinet members within the UK Government and devolved nations, as well as metro mayors.

The UK Government has committed to responding to CMA recommendations within 90 days.

Further CMA analysis and recommendations on public procurement and market shaping will follow later this year. For more information, visit the civil engineering market study page.

Responding, Association for Construction and Engineering’s Policy Director, Marie-Claude Hemming, said: “This is an important piece of work from the CMA and it should be treated as a serious opportunity for reform. The report reflects many of the concerns our members have raised for some time about the way the civil engineering market is structured and how that affects cost, delivery and innovation.

“What matters now is implementation. If government can continue to provide clearer long-term direction, strengthen procurement capability and remove unnecessary barriers to innovation, our sector will be better placed to deliver the infrastructure the country needs and the long-term value the public expects.

“To this end, ACE is calling on government and its delivery bodies to move quickly from diagnosis to delivery, with clear ownership and timescales for reform. That includes putting in place multi-year funding settlements, building on the infrastructure pipeline, improving procurement capability across public authorities, standardising processes where appropriate and creating a regulatory environment that supports innovation and SME participation rather than slowing it down. 

“We want to work with government, clients and partners across the supply chain to support the implementation of the CMA’s recommendations and help build a more efficient, competitive and innovative civil engineering market once and for all.” 

Alex Vaughan, Chief Executive of Costain, said: “The CMA’s report rightly highlights the need for a more collaborative, long-term, and outcomes-focused approach to driving UK economic growth through the delivery of critical infrastructure.

“To achieve this, the industry must move beyond short-term, transactional delivery models and focus instead on whole-life performance. This shift, alongside continued and necessary skills development, will be essential for the UK to successfully deliver complex infrastructure programmes.

“The UK’s 10-Year Infrastructure Strategy and Infrastructure Pipeline have been major steps forward, providing greater visibility of future investment that will foster stronger supply chain partnerships and encourage earlier collaboration between asset owners and the industry. Achieving this will boost UK productivity and deliver critical programmes that benefit communities across the country, as well as the taxpayer.

“The UK has world-class engineering capability, but this is an industry that thrives on predictability and clear decision-making from government. We’re working closely with government, NISTA and our long-term trusted partners to deliver complex, fit-for-purpose infrastructure across our water, energy, defence and transportation systems.

“Consistency and continuity from government will unlock the UK’s full infrastructure potential and help create a more prosperous, resilient and decarbonised future.”