Higher education construction sector spending surge

The Higher education construction sector continues to increase spend on capital projects despite rising concerns over changes to student fees, which could jeopardise their funding mechanisms.

In the 12 months to Q1 2018, 14 of the industry’s top 100 clients were from the higher education sector and had let nearly £2.3 billion-worth of work according to Glenigan’s Construction market analysis.

The University of Cambridge is the top ranked institution with spending of £312 million, which secured 17th position.

Work let by the University of Cambridge includes the £73 million Project Bellatrix and developments in the north west of the city combining academic accommodation with housing.

Sussex is next highest with spending of £228 million meriting 28th position. There are two other universities in the top 50: Keele is 32nd with spending of £199 million and Glasgow in 41st place after letting £177 million-worth of work.

The Universities Partnership Programme (UPP) is also ranked in this echelon with spending of £188.6 million, while Unite, which develops student accommodation for the higher education sector, is in 30th place with spending of £208 million.

Universities are also investing directly in student halls of residence projects and Durham is in 56th place after placing £146 million-worth of work, including £85 million on a project at Mount Oswald to deliver two colleges and around 500 self-catering rooms.

Another seven universities are in the top 100 with the London School of Economics (LSE) spending £142 million including the £140 million Paul Marshall Building project at Lincoln’s Inn Fields.

This ranks the LSE in 61st position two places ahead of Warwick, which has spent £137 million.

The other higher education clients in the top 100 are Imperial College in 71st position (£126 million), Newcastle in 77th (£116 million) and Manchester Metropolitan in 86th place (£108 million). Birmingham (£96 million) and Edinburgh £93 million) also just squeeze into the top 100.

In 2014, research by BiGGAR Economics claimed that the 24 universities in the Russell Group alone would spend £9 billion between 2012/13 and 2016/17 and Glenigan’s research shows that surge is appearing.

In the year to Q1 2017, the Russell Group accounted for 78% of higher education contracts placed by clients in the top 100.

That reliance has dropped slightly to 71% in the latest table, which still features nine Russell Group universities: Birmingham, Durham, Cambridge, Edinburgh, Glasgow, Imperial, LSE, Newcastle and Warwick.

Overall, the aggregate spending of the 12 universities in Glenigan’s ranking of the industry’s top 100 clients in the 12 months to Q1 2018 was £1.9 billion. To put that sum in context, work let by the

Department of Education (DoE) over the same period was less than half that figure.

In the 12 months to Q1 2017, spending by the universities in the top 100 and Unite totaled just under £1.7 billion, which was 7% of the total spend by the top 100 clients.

In the latest table, higher education work provides 14% of the total spend by the top 100 clients, which underlines the strength of the boom that is underway as spending in other sectors weakens