Paul Henty, Partner and Solicitor
- Introduction
On 21 May 2026, the UK Competition and Markets Authority published its final report in the Civil Engineering Market Study[1]. After eleven months of evidence-gathering and engagement with governments, procuring authorities and industry, the CMA made nineteen recommendations to the UK government and devolved administrations, seven of which it identifies as critical. The headline opportunity is significant: possible efficiency savings of up to £5 billion per year against estimated annual public expenditure of approximately £19 billion on road and rail infrastructure, excluding HS2. The figure is best understood as an implementation prize, not a forecast saving. It is derived from applying a 10 to 25% efficiency-savings range identified by the National Infrastructure Commission to the CMA’s estimate of annual public road and rail expenditure.
For a European competition audience, two framing points help locate the exercise. A UK market study under the Enterprise Act 2002 is closer in function to a Commission sector inquiry under Article 17 of Regulation 1/2003 than to an enforcement case – it produces findings and recommendations rather than infringement decisions. And although the work is conducted by the competition authority, the substance is overwhelmingly procurement reform rather than antitrust enforcement: supply-side concentration is described as “not inherently concerning,” and the diagnosed problems sit on the demand side. That distinction matters because the CMA deliberately did not move to a market investigation reference. It found wide-ranging and deep-rooted issues but identified the core concerns as arising from public-policy determined features, including short-term funding settlements and uncertain project pipelines. On that basis, the CMA concluded that formal recommendations were more appropriate and proportionate than the order-making route available after a market investigation reference.
The CMA’s timing is also interesting. The UK’s new rules on public procurement – the Procurement Act 2023 (PA 23) – took effect only in February 2025. The CMA did not opt to allow time to see how the new law could affect the competitive landscape. The report and its findings may be of interest to the EU Commission, which is currently itself in the midst of a review of the EU Public and Utilities Directives. For the European private sector, the results will also be of interest. The CMA estimates the value of the UK infrastructure market to be around £19 billion a year in public road and rail expenditure, excluding the High Speed 2 rail project, with the report identifying Siemens and Skanska alongside UK contractors such as Balfour Beatty, Costain, Kier, BAM Nuttall and Murphy.
- The diagnosis
The CMA finds that the demand side of the infrastructure market in the UK is fragmented: there are six national bodies and hundreds of local authorities making project-by-project decisions in the absence of coordinated strategic direction. Funding cycles are short, pipelines uncertain, procurement practices inconsistent, and regulatory compliance burdensome.
On the supply side, the report estimates that 15 to 20 firms regularly bid for public road and rail contracts, with an average of six bidders per competed National Highways enhancement contract and three to five for contracts in the devolved nations. The CMA’s own caveat is that multiple bidders are “a necessary but not sufficient condition for a competitive tender process” (para 2.26, final report). Business dynamism (measured by entry and exit rates and the persistence of large firms at the top of the league table) has weakened consistently over the last two decades. SMEs face barriers to entry and scale that the public sector has not effectively addressed.
The findings will read as familiar to anyone tracking procurement debates elsewhere in Europe. What is striking is the CMA’s own acknowledgement, at paragraph 40, of a “persistent failure to track and drive forward the implementation of previous recommendations.” The diagnosis is not the difficult part. The harder question is whether the centre of government can impose durable market-shaping discipline on a sector whose problems arise precisely because decision-making has been fragmented across departments, arm’s-length bodies, devolved administrations and local authorities. Some of those bodies may be less receptive to additional central direction from the CMA, particularly while still bedding in the PA 23 and related statutory guidance from the Cabinet Office.
- The recommendation architecture
The nineteen recommendations are organised around five root causes: a fragmented public sector landscape, pipeline uncertainty, capacity constraints, procurement policy and practice, and regulatory barriers. That structure is important because the CMA is not proposing isolated procurement tweaks; it is proposing a market-shaping programme.
- Overarching market shaping (Recommendations 1-2): HM Treasury is asked to take strategic ownership of system-wide reform, supported in practice by the recently established National Infrastructure and Service Transformation Authority. A strategic sector plan should be published with annual progress reporting. This addresses the implementation-failure problem head-on – the question is whether a single department can hold accountability across a landscape this fragmented;
- Addressing pipeline uncertainty (Recommendations 3-5): Multi-year capital budgets of at least three years for all procuring authorities are recommended. Also favoured is greater flexibility for procurers to commit to contracts extending beyond budget settlement periods (the CMA itself flagging that this could favour larger firms but considering the benefit to outweigh). Expansion of the UK-wide infrastructure pipeline to include devolved projects, with funding status and procurement detail visible to the market. The CMA is also realistic about the limits of multi-year funding. Consultation responses warned that even multi-year cycles can be undermined by annual departmental settlements, changing government priorities, poor procurement behaviours and weak pipeline quality. The policy objective is not merely to publish a longer list of projects but to create a credible and funded pipeline capable of changing supplier behaviour;
- Public authority capacity (Recommendations 6-8): Strategic workforce plans for commercial and technical capability. Pooled capacity arrangements so smaller authorities can access specialist expertise. Joint procurement across authorities where appropriate, including more centralised procurement across Network Rail’s five regions. The diagnosis on capacity is acute: the Report records 5,900 civil engineering skills shortage vacancies in 2024. But workforce plans will be judged by whether they address recruitment and retention conditions, not merely whether they reorganise scarce expertise. Without dealing with pay, status and career pathways in the public sector, there is a risk that “capability building” becomes another name for better use of consultants;
- Procurement policy and practice (Recommendations 9-15) This is the largest cluster:
- Mandatory compliance with the Construction Playbook, ending the “comply or explain” approach. The Construction Playbook is UK Government guidance, issued by the Cabinet Office, on best practice in the procurement and delivery of public works projects. It sets out core principles on areas such as early market engagement, risk allocation and whole-life value, with the aim of improving consistency and outcomes across public sector construction procurement.
- Published innovation targets in supply chains every three to five years.
- All future frameworks to adhere to the Mosey “Gold Standards.” Greater standardisation of procurement processes across authorities.
- A zero-based review of bespoke “Z clause” contract amendments that distort risk allocation[2].
- Mandated use of a limited set of standard designs for repeated outputs such as bridges and gantries – the report draws parallels to mandatory national design standards in France, Germany, Canada and Ireland. Strengthened guidance on aligning external designers’ incentives with procurers’. Several of these are pro-competitive in orthodox terms: process standardisation, reduced bespoke risk amendments, clearer innovation signalling and standard designs should all reduce bid costs, improve comparability and lower incumbency advantages. The caveat is that standardisation must not become a disguised preference for familiar solutions or incumbent delivery models. The Report’s most promising idea is in our view standardisation of repeatable outputs, not standardisation of ambition; and
- Reducing regulatory barriers (Recommendations 16-19). Open challenge functions for industry to challenge out-of-date or duplicative technical standards. A single approved list of supplier accreditations to end overlapping pre-qualification regimes. Fast-track approval processes for innovations in road and rail, including recognition of reference-class data. Standardised utility-diversion response times.
The Report consciously steps back from formal recommendations on planning reform, not because planning is immaterial, but because reforms were already underway. In the main report, the CMA refers to the Planning and Infrastructure Act, proposed updates to the National Planning Policy Framework, statutory consultee reform, DEFRA’s lead environmental regulator model, the Infrastructure (Wales) Act 2024 and Scotland’s NPF4. Appendix A also discusses the Planning and Infrastructure Bill in its account of the reform programme. The CMA therefore focuses its regulatory recommendations on technical standards, accreditations and approvals rather than duplicating the planning reform agenda.
- A competition-law eye on the package
Most of the package aligns straightforwardly with familiar pro-competitive instincts: lower entry costs, greater transparency, reduced incumbency advantages, faster regulatory throughput. Two recommendations warrant closer attention, because their competition effect is not self-evident from the framing.
The first is Recommendation 4 on longer-term contracts. The Report defines longer-term contracting as contracts spanning more than three years. It presents the dynamic-competition case clearly: longer commitments can justify investment in skills, equipment and innovation, reduce procurement costs and support programme-level learning. The static-competition cost is equally real: the longer the contract, the longer the market is closed to rivals. Indeed, Recommendation 4 may appear to sit oddly with the CMA’s role as a competition regulator. Shorter contracts usually mean more frequent opportunities to compete. But the CMA is looking at dynamic competition, not simply the number of tender events. If suppliers are expected to invest in people, equipment, technology and innovation, they need a credible opportunity to earn a return on that investment. As any engineering consultancy will recognise, participating in complex infrastructure procurements is itself expensive and time-consuming. A market with frequent tenders but weak investment incentives may be contestable in form yet underpowered in substance.
Article 33 of Directive 2014/24/EU caps framework agreements at four years for precisely this reason. That EU comparison is not directly applicable to all UK arrangements post-Brexit, but it remains analytically useful because it captures the same foreclosure concern.
The missing operational link is to the Procurement Act 2023 (PA 23) architecture. Open frameworks (s. 49 PA 23) and dynamic markets (s 34-40 PA 23) are designed, in different ways, to keep opportunities contestable over time. Open frameworks, a framework agreement with a break point to allow for new competition, are a UK innovation which EU procurement rules do not yet have. A fuller Recommendation 4 would have explained when longer contracts should be channelled through those mechanisms, when break clauses or periodic re-tendering should be expected, and when direct long-duration commitments are justified by safety-critical continuity or programme-level efficiencies. The Report also records Network Rail’s evidence that it avoids break clauses because they are “potentially costly and therefore riskier,” which suggests the cultural barrier to mitigation is itself part of the problem.
The second issue sits at paragraph 22 of the Executive Summary, on prior experience. The CMA correctly identifies that requirements for specific prior experience or a proven track record can favour incumbents even where firms have relevant capability from adjacent markets. That is a classic procurement competition problem: the authority wants assurance, but the chosen proxy narrows the market. The Report records a useful example of what reform looks like in practice – Network Rail told the CMA it now focuses on broader infrastructure experience rather than rail-specific experience, to widen the addressable supplier base. The Report would have been stronger had it converted that insight into a defensible procurement template: acceptable capability proxies, treatment of transferable experience, worked examples of weighting, and model drafting capable of withstanding bidder challenge.
- What to watch
The CMA has produced a careful diagnostic and a coherent package. Several recommendations should be relatively deliverable, particularly those aimed at lowering regulatory barriers, simplifying accreditation, standardising procurement processes and reducing unnecessary bespoke risk allocation. The harder recommendations are those that require government to change its own behaviour: multi-year funding discipline, credible pipelines, public-sector capability and genuine strategic ownership.
Now that the Report has been published, the UK Government has committed to respond within 90 days. Its response will likely set out the extent to which it accepts the CMA’s findings, along with the steps it proposes to adopt to implement these.
The Report’s most important sentence may therefore be its acknowledgement of the “persistent failure to track and drive forward the implementation of previous recommendations.” The £5 billion opportunity is not in the analysis. It lies in whether government can make the procurement system behave differently, because in infrastructure, as in procurement, old habits die hard.
[1] Civil engineering market study – GOV.UK
[2] “Z clauses” are bespoke amendments to standard form contracts (most commonly NEC contracts) used in UK construction procurement. While they can address project-specific requirements, they are often criticised where they materially alter the standard allocation of risk, add complexity, or reintroduce issues that standard forms are designed to avoid.