In a new tie-up with data firm Tussell, Construction News brings you quarterly data on construction contracts awarded by the public sector.
View the biggest contractors, clients, frameworks and opportunities, with analysis from Tussell.
Market overview
The UK government awarded 1,529 contracts relating to construction in Q4 2023, worth a total £3.8b.
This value is down 54 per cent on the previous quarter, due to both a decrease in volume and value of contracts awarded. This quarter, the highest value contract awarded was £575m by A2 Dominion Group to Mears. In contrast, last quarter the highest value contract awarded was £1.2b by the FCDO to CBRE Managed Services. This highlights the fluctuation in average contract value across quarters.
While the value of contract awards within the construction sector is dynamic, the volume of construction contracts is less variable, averaging 2,109 per quarter. Due to the delay in publication of contracts, we will not see the full volume and value of Q4 until next quarter.
Value and volume of construction contract awards, Q1 2022 to Q4 2023
Top five buyer types by contract award value, and volume of awards, Q4 2023
In Q4 2023, local government awarded the highest value of construction contracts, at a value of £1.7b across 917 contracts. This amounted to 49 per cent of the total value of construction contracts awarded by the UK public sector in this quarter.
Contracts awarded by central government had a total value of £903m, but these were at less than a quarter of the volume of local government.
Housing associations had a high average contract value of £9.9m, awarding only 68 contracts with a total contract value of £673m.
Top five buyers by value, and volume of contracts awarded, Q4 2023
Top five suppliers by value, and volume of contracts awarded, Q4 2023
Mears was the top supplier this quarter by contract award value, having won the highest value contract in Q4, worth £575m. This was awarded by A2Dominion Group, for the provision of a wide range of works arising from fire risk assessments.
The MOD was the top buyer in Q4 2023. They awarded the second highest value contract, worth £271m to Lendlease for infrastructure design and build work at Imjin Barracks. This was only one out of 33 contract awards by the MOD this quarter, but accounted for 46 per cent of its total contract award value in Q4 alone.
A £265m contract award to Muse Developments (owned by Morgan Sindall) for the Mell Square Town Centre regeneration explains Solihull Metropolitan District’s council’s position in the ranking. This contract includes reconfiguration and redevelopment to create a new town centre destination. Morgan Sindall won eight other contracts alongside this, including a £58m contract award by the MOD.
Mole Valley District Council awarded one £200m contract this quarter to Kier for the redevelopment project in Leatherhead. This will include improving the public space areas and pedestrian routes alongside the build of 450 new homes. Further to this, Kier was also awarded £40m through three other contracts.
Frameworks
Proportion of construction contracts awarded through a framework, Q1 2022 to Q4 2023
In Q4 2023, 243 construction contracts were called off via a framework. With a combined value of £773m, these call-offs totalled 21 per cent of the total award value, much higher than the previous quarter. In Q3, none of the top 10 highest value contracts were called off via a framework, whereas in Q4, three of the top 10 were, driving up the call-off value proportion.
This increase in call-off value proportion is down to an increase in the average value of call-offs this quarter, rather than volume – the volume decreased by around 100 from the previous quarter.
Top five frameworks by contract award value, Q4 2023
This quarter, the Meridian Water Strategic Infrastructure Works was the framework with the highest value of call-offs, developed specifically for call-off works that support the development at Meridian Water. This was driven by a £121m contract award for works to Vinci Construction by Enfield Council, lasting two years.
The Modular Buildings framework agreement by NHS Shared Business Services had the second highest call-off award value. This was driven by a £72m contract award to Reds10 for the Single Living Accommodation project by the MOD, which will last four years.
The Construction Works and Associated Services framework by CCS had both a high value and volume of call-offs this quarter. This included a £30m contract by Surrey County Council to Balfour Beatty Group for works as part of the Housing Infrastructure Fund scheme, and an £11.9m contract by the University of Edinburgh to John Graham Construction to undertake housing compliance works.
When looking at volume of contract awards, the Collaborative Delivery Framework had the highest number of call-offs of the top five frameworks. This was developed by the Environment Agency specifically for the provision of capital investment and improvement works for flood defence assets.
Opportunities
Volume and value of PINs by quarter, Q1 2023-Q4 2023
All data in comes directly from Tussell’s online market intelligence platform. To see how Tussell can help you do more business with government, visit tussell.com.
