A week before Christmas, competition regulator the Competition and Markets Authority (CMA) released an interim report that passed without too much notice, part of its market study into the civil engineering market for roads and railways. The interim report identified “persistent issues” within the sector and concluded that evidence suggests that the market is caught in a cycle of inefficiency, characterised by high costs and low investment.
The ways that road and railway projects are scoped, procured and regulated were found wanting so the CMA identified options that it says present significant opportunities to improve performance in these areas that will promote UK economic growth. These options will be further tested and developed in the remainder of the market study, which started in June 2025, CMA says.
The CMA said at the outset that it would examine how supply chains, public procurement, and regulation could be improved to deliver better outcomes for the public and the economy, as well as supporting the government’s mission to drive growth and productivity.
CMA Chief Executive Sarah Cardell said when the interim report came out that civil engineering is key to making sure the vital transport network operates effectively and promised to continue to develop and refine the interim report’s initial proposals into “a mutually reinforcing package of measures”.
So there is more work to do but the CMA has so far concluded – provisionally it says – that the civil engineering market for public roads and railways is caught in a negative cycle that is holding back the sector’s ability to support UK growth and productivity. CMA also has formed a strong idea on the root causes of the issues, and they include uncertain and short-term funding, a risk-averse culture, and regulatory barriers to entry and growth.
All of these are long recognised features of the road and railways civil engineering market that the industry and informed external analysts have for many years spoken out about. Civil engineering contractors and other suppliers in other sectors also operate under the same pressures.
The CMA has identified the areas it will focus on for the remainder of its study. They include exploring ways to create a more stable and predictable funding environment, enabling authorities and suppliers to plan and invest for the long term. If significant improvement in those areas was achieved the CMA’s work would earn the thanks of an entire industry. And who knows, any improvements could spread to other areas of construction demand.
Another welcome focus is considering how to strengthen procurement capability across public bodies, ensuring that the right skills and expertise are in place to deliver effective contracts. The regulator will look at ways to encourage a more balanced approach to risk, so that procurement practices reward innovation and performance rather than caution. It will examine opportunities to streamline regulatory processes and accreditations to reduce unnecessary costs and delays, making it easier for firms, especially smaller ones, to enter and grow.
Ways are also being sought to foster greater collaboration and consistency across government, public authorities, and industry to drive efficiency and value for money. Anyone with views or ideas to pass on for improvement in these areas has until 28 January to pass them on to the CMA which promises recommendations for government and public authorities in its final report due in spring 2026.
Nick Barrett
Editor