PUBLIC & CIVIC
Modest growth in construction activity forecast amid funding constraints
Public sector construction activity is expected to see a slight increase in the next financial year. In the previous financial year, public sector construction spending was around £164bn. For the upcoming year, forecasts suggest a modest growth of approximately 0.5%. Despite challenges like high interest rates and material costs, the overall trend remains positive.
There is strong optimism for water and sewer infrastructure projects, driven by the need to upgrade ageing systems and improve water quality. Healthcare construction in the UK is expected to increase in the next financial year. Recent reports indicate that healthcare construction project starts rebounded by 11% in 2024, reversing the 8% decline during 2023. Projects for both secondary and higher education institutions are expected to see growth. Investments in power infrastructure, including renewable energy projects, are also on the rise. All these projects reflect an increase in public sector investment in essential infrastructure.
Local authority spending in the next financial year is expected to increase due to funding announced in the Autumn Budget. Over £4bn in extra funding has been allocated for local government services, with £1.3bn of this going through the 2025/26 Local Government Finance Settlement. This funding aims to support essential services and address some of the financial pressures faced by local authorities, which may lead to some capital construction projects progressing.
However, there are concerns about long-term financial sustainability. The Local Government Association has highlighted a potential funding gap of over £8bn by 2028/29 if current cost and demand trends continue. This gap is driven by factors such as demographic changes, inflation, and rising costs of service delivery.
Overall, while there is some positive news for the next financial year, local authorities will need to carefully manage their budgets to address ongoing financial challenges.
LIVERPOOL, UK
Merseyside Fire and Rescue Service
RLB’s cost management expertise was integral to the delivery of a new £40m training and development academy for Merseyside Fire and Rescue Service (MFRS).
The state-of-the-art facility, the UK’s most technologically advanced emergency service training site, will equip Merseyside’s firefighters with the skills and knowledge they need to save life and property in a range of fire and rescue scenarios.
