Welsh education construction

Last Updated:

29th July 2019

Spending of £1.5 billion is expected to materialise for the Welsh education construction sector through a new public private delivery model being set up by the Welsh government to deliver a major new programme of school and college building.

The proposals involve a private sector partner entering into a joint venture with the Development Bank of Wales.

The two parties will form a new Welsh Education Partnership Company to provide project development and delivery, supply chain assembly and management on new schools and colleges (Glenigan Project ID: 1924538).

Three bidders will be shortlisted for the agreement, which will run for the next decade. Unlike previous public private partnership deals, the Welsh model will give the public sector a 20% equity stake. Cleaning, catering and low value maintenance are also excluded from the deal.

A bidders day was held on July 18 in Cardiff but interested bidders have until September 9 to express an interest in the proposals.

Glenigan’s construction market research suggests the programme could produce a major upswing in Welsh education construction work with some approved projects potentially already in place.

Project starts falter

Welsh education construction projects starting on site this year include an £8.1 million primary school being built at Ysgol y Garnedd in Gwynedd (Project ID: 18321858) and a £7 million school at Ysgol y Graig in Mid Glamorgan (Glenigan Project ID: 18325167).

A £19.1 million comprehensive school is due to start on site early next year in Neath (Project ID: 18366242), but with a new model being put in place a hiatus has emerged in new work.

The underlying value of education construction project starts in Wales fell 24% in the first half of 2019 according to Glenigan’s construction data. There was an even bigger fall of 36% in 2018, but this area has previously been a strong workstream in the past.

The underlying value of education work starting on site in both 2016 and 2017 topped more than £400 million and there are indications that a revival could take place.

In the pipeline

Other projects have a contractor on board but are still awaiting planning permission, such as a £10 million primary schools project in Aberdare (Glenigan Project ID: 16385287).

Education work given planning permission dropped off last year with the value of projects slumping 78%.

This has depressed the short-term pipeline of work, but Glenigan’s construction research shows that in 2017 there was a 28% surge in education work as £367 million-worth of work secured planning permission.

Overall, between the start of 2015 and Q2 2919, £1 billion-worth of education work was given detailed planning permission in Wales.

Some of this work is in the higher education sector, such as a £200 million academic and accommodation block at Swansea University (Glenigan Project ID: 17427409).

Recovery for Welsh construction industry slow to materialise