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With Update June 2014 WITH UPDATE JUNE 2014 A PRODUCT Q2 2014 JUNE 2014 UPDATE 1/UPDATE SUMMARY Since Building published its UK Education underpinned by continued high levels of Work across all sectors of !"#$-#% white paper, in January !"#$, the spending in HEFE, and by a sharp upturn in education spend combined, education sector in the UK has begun to primary school work. including primary, secondary, experience significant recovery from the cuts This new eight-page preface to the it suffered during recession. original UK Education !"#$-#% white paper and higher and further education Work across all sectors of education spend supplements its market research with detailed (HEFE), grew by 39% in 2013, combined, including primary, secondary, education capital spending statistics for !"#! according to data from economic and higher and further education (HEFE), and !"#$, analysis of key current and future analyst Barbour ABI grew by $'( in !"#$, according to data from spending trends in schools and HEFE, and economic analyst Barbour ABI. While the updated public funding information for !"#)- sector clearly has some way to go to near #% and beyond. The update also includes a pre-recession levels, its growth trajectory detailed report on the progress of the Priority is now established. This recovery has been Schools Building Programme. !/CONTENTS "/RECENT EDUCATION SECTOR SPENDING TRENDS ii &/ MARKET OPPORTUNITIES AND CHALLENGES BY SCHOOL TYPE vi $.# Regional schools spending trends %.# Primary $.! Recent spending trends in HEFE %.! Secondary $.$ Highest spending HEFE clients !"#$ %.$ Free schools %.) UTCs and studio schools #/ FUNDING FOR EDUCATION BUILDING WORK !$%#-!$%& AND BEYOND v ).# Funding for schools '/PRIORITY SCHOOLS BUILDING PROGRAMME UPDATE vii ).#.# Direct capital funding breakdowns for England ).# Directly funded schools – procurement to date ).#.! PF! funding ).! PF! schools – procurement to date ).#.$ Funding settlements for schools in Scotland and Wales !"#)-#% ).$ Future Priority Schools Building Programme work and beyond ).! Funding for HEFE building work !"#)-#% and beyond ).!.# HEFCE funding (/METHODOLOGY viii ).!.! Public funding for FE >> Continue to the full white paper from January !"#$ i A PRODUCT 3/ RECENT EDUCATION SECTOR SPENDING TRENDS In total, the value of construction contracts [!] VALUE OF CONTRACTS AWARDED BY SECTOR, "#!#-!$ awarded in the education sector across England, Scotland and Wales leapt by !"# in $%&! compared with $%&$, according to contracts award data from Barbour ABI 2010 covering primary, secondary, FE and HE sectors. The combined education sector was worth '(.)bn in $%&$, with this growing to 2011 Primary ').(bn in $%&!. Secondary This growth was primarily driven by Private schools work awarded in the HE and FE sectors, 2012 State colleges / Universities which remain the area of highest spending in education, having overtaken secondary Trade colleges / Training centres schools in $%&&. Contract awards across 2013 universities and state colleges, including training colleges, was '%."bn greater in $%&! 0 500 1,0001,500 2,0002,500 3,000 3,5000 than in $%&$, a rise of (*# (fig &). This was closely followed by growth in the £m primary sector, which saw '&.+bn of work awarded in $%&! compared with '%."bn Primary Secondary Private schools State colleges / Trade colleges / 2013 in $%&$. This was a )(# increase, making (!) (!) (!) Universities (!) Training centres (!) primary the fastest growing sector. The $%&% &!%,+,&,(+% !,%%!,!$,,*)% !)%,&+$,++% $,*$%,$*),"$( &+%,*+),"!* 2012 pace of recovery in the sector means East$%&& Midlands &,$&(,("!,"$* &,+)+,*+%,%%% !!,,&"!,$+% &,,%*,%&+,&!* &"*,%+*,%%% 2011 it now exceeds its $%&% level, when it was East of$%&$ England "&*,*(+,)&& &,&&),+*",!(* )+),%%%,,$, &,),&,+"$,+%% $+",&)+,,%& worth '&.!bn. $%&! &,+&+,,((,%$% &,!)!,*"!,$)) )"+,!&&,+%% $,($$,(!&,$)* (($,(%+,%%% London In $%&!, primary also marginally overtook Source: Barbour ABI North-east the secondary market in terms of spend, North-west which can be attributed partly to the political drive to increase primary school places and Scotland partly to the shorter lead-in time for primary South-east 2011 projects, which tend to take less time to plan South-west 2012 than secondary schools so will benefit from Wales 2013 increased spending more quickly. However, West Midlands the secondary market also improved Yorkshire & Humber between $%&$ and $%&!, driven in part by Trade colleges / Training centres the improving pace of the Priority Schools 0 200 400600 8001,000 £m Building Programme, which includes State colleges / universities both primary and secondary schools. The sector grew &,#, from '&.&bn in $%&$ to Private schools '&.(bn in $%&!. Secondary The HE and FE sectors remain the area of highest spending Primary in education. Contract awards across universities and state colleges, including training colleges, was £0.9bn greater in 2013 than in 2012, a rise of 47% ii A PRODUCT 01,000 2,000 3,000 4,000 5,000 £m 2010 2011 Primary Secondary Private schools 2012 State colleges / Universities Trade colleges / Training centres 2013 0 500 1,0001,500 2,0002,500 3,000 3,5000 £m 2013 $.# REGIONAL SCHOOLS SPENDING [!] TOTAL VALUE OF SCHOOLS CONTRACTS AWARDED BY REGION, !"##-!"#$ TRENDS 2012 East Midlands In the schools sector, recovery is apparent 2011 in the majority of regions. The London, East of England South-east, North-east, North-west, Scotland, London South-west, and Yorkshire & Humber regions North-east all experienced growth in the combined total of work awarded across primary, secondary North-west and private schools, with the East of England Scotland broadly flat. The only markets to experience South-east 2011 a drop in schools work awarded were the East Midlands and West Midlands. South-west 2012 Regionally, the schools market continued Wales 2013 to be dominated by London and the South- West Midlands east, a trend which has been apparent for the past four years. The total value of contracts Yorkshire & Humber Trade colleges / Training centres awarded on primary, secondary and private 0 200 400600 8001,000 schools in London was +&#"m in (#!), a '!, £m leap on (#!( levels. In the South-east, the State colleges / universities total work awarded was +$*&m, representing !"## !"#! !"#$ a $%, rise. Scotland was the third biggest East Midlands !"#,$$!,### !%%,&%$,'## !"$,%$",('# Private schools region by value, with +$"(m of contracts East of England ))',##','## ("',$'*,&'# ("",&'*,%'# awarded in (#!) – a rise of !), on (#!( levels. London "&),*"*,$(% ')$,!"(,*#$ &#",#'#,(%# Secondary However, the fastest growing region for North-east !'",%##,### "(,*$",### !)(,**",&!' schools work was the North-east, which saw North-west )#%,)$!,('# ((%,)(*,### )%$,%#$,('# Primary work awarded increase by !!), to +!)(m in Scotland ))%,"&(,'## )$',''(,&(& $"(,%%(,'## (#!), compared with +")m in (#!(. This was South-east $$$,")),### )$#,'"",$'$ $*&,")",)'! followed by the South-west, with an increase South-west !&",)$",### !*#,''(,%'# )$%,'%$,"## of &), to +)$%m of work awarded in (#!). Wales (!$,!'!,'## !*',%'#,### !!',$$(,'## West Midlands !!),"*!,'## ('),$%&,'## ($%,)"&,### Yorkshire & Humber !%&,$%','## *","'),### !'%,%*%,'## The total value of contracts Total ),!!&,$)%,!%% (,"*#,)(',%&" ),'%$,*$&,%&" awarded on primary, secondary Source: Barbour ABI and private schools in London was £806m in 2013, a 51% leap on 2012 levels. In the South-east, the total work awarded was £498m, representing a 47% rise iii A PRODUCT 01,000 2,000 3,000 4,000 5,000 £m !." RECENT SPENDING TRENDS with institutions proving resourceful in The Association of University IN HEFE attracting private sector funding, the decline Estates Directors said in 2008 levelled out in !"#!, with (#.%bn being spent that a “conservative estimate” of The HE and FE sectors overtook secondary compared with (!."bn in !"##, according schools as the greatest area of spending on to data by Barbour ABI. In !"#$, the market the cost of replacing the 1960s construction work in education in !"##. These experienced a sharp upturn, with (!.%bn of university buildings in England sectors remained the area of largest spend work being awarded. was £11bn !"#! and !"#$, due to a combination of the cuts to school building spend in the recession and the continued pressure on universities to !.! HIGHEST SPENDING HEFE upgrade their estates. CLIENTS IN "%#! This pressure is partly a result of the amount of work necessary to upgrade See figure $, below. existing buildings, particularly the large proportion of the estate dating from the #%&"s – an era of construction associated [!] TOP #$ UNIVERSITY AND COLLEGE CLIENTS BY VALUE OF PROJECTS ON WHICH CONTRACTORS WERE APPOINTED ("%#!) with problems regarding heating, ventilation and panel cladding systems, problems compounded by a historic lack of Ranking Company Number Value(!) maintenance. The Association of University of projects of schemes Estates Directors (AUDE) said in !""' # Newcastle University ! !"",#"",""" that a “conservative estimate” of the cost of ! City of Glasgow College ! !$),&'!,*"" replacing the #%&"s university buildings in $ Imperial College London * #"),"+",""" England was (##bn. + Department for Education ## %",)"",""" The pressure is also driven by competition * Birmingham City University # &",""",""" for research funding by investing in facilities, & University of Sheffield * *),'&#,""" and competition to attract students, ) Sheffield Hallam University * *$,!"",""" particularly given changes to the tuition fee ' North Hertfordshire
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