Featured Sector: Education

The education sector is now recovering from a sharp fall in activity during 2012, during which new starts fell by 27% as the Building Schools for the Future programme ended. Education starts during the final quarter of 2013 were 43% higher than a year before, and starts during the whole of 2013 were 21% higher than 2012. Several positive long term drivers of activity are expected to fuel further opportunities in the sector in 2014 and 2015.

Government funding programmes are leading through to increased construction activity. The Priority Schools Building Programme is gradually gathering pace. Moreover the need to provide extra primary school places, as well as growing pressure on secondary capacity in London boroughs, will mean a continued stream of funding for construction.

Universities will also continue to expand investment into the facilities they need to attract students, with the removal of the cap on student numbers announced in the Autumn statement set to boost Universities’ incomes further.

Some publicly-funded sectors, notably health and community and amenity work, are still struggling from the impact of austerity cuts but after a period of decline, new education work has returned to growth.

Glenigan’s data shows a 17% rise in new starts in the three months to April. In the year to April 2014, the growth is even more marked and up by 21%. Outside of civil engineering and social housing, education has grown the fastest of the 10 sectors tracked by Glenigan over this period.

The region experiencing the largest proportion of this growth so far in 2014 is the West Midlands. Outside of London and the South East, the West Midlands also saw the largest amount of new education starts in 2014.

This looks set to continue as a number of projects in the Midlands and London have been included in the Education Funding Agency (EFA) £4 billion Priority Schools Building Framework. This framework was revamped last November and the first batch awarded in March was in the Midlands.

The EFA’s PF2 initiative for schools’ building has also seen growth in the Midlands as procurement moves forward on more than £500 million-worth of work.

Another 39 education projects were also identified at the end of last year in another state education initiative, the £820 million Targeted Basic Need programme, which will eventually see 41 new schools built and another 331 expanded.

This suggests that the growth experienced in this sector looks set to be sustained.