The Competition and Markets Authority (CMA) has released the findings of its market study into road and rail infrastructure, recommending decisive actions to lower expenditures whilst boosting innovation and productivity.

The market study on public road and rail infrastructure follows 11 months of detailed analysis and collaboration across government, procuring authorities, and businesses. The findings highlight the financial burden of historical approaches and emphasize the massive potential for reform.

The CMA is advising the government to adopt a more strategic, coordinated approach to infrastructure delivery backed by a definitive plan for the sector. Beyond the specific recommendations for road and rail, the watchdog notes that the lessons learned could be applied more broadly across all public infrastructure procurement.

Sarah Cardell, Chief Executive of the CMA, said: "Our work on civil engineering shows that a short term and fragmented approach to procurement in road and rail is driving up costs, slowing delivery and holding back innovation.

"This is an opportunity for systemic change – but it requires strong central coordination, and a reframing of road and rail procurement as a lever for growth and innovation. The CMA will continue to play its part, bringing independent advice, analysis and practical solutions to drive economic growth."

Excluding High Speed 2, roughly £19 billion of taxpayers' money was spent on public road and railway infrastructure during 2023/24. These markets have historically underdelivered regarding productivity, innovation, and delivery speeds. The CMA's study identifies the main causes—funding uncertainty, short-term decision-making, complex regulation, and capability gaps—and outlines concrete actions to rectify them.

External research highlighted within the report indicates that the UK and devolved governments could achieve potential savings of up to £5 billion annually by tackling these market challenges. This would simultaneously shorten delivery timelines, boost innovation and investment, and help UK businesses grow and compete.

The CMA’s targeted package of reforms in public road and rail civil engineering includes several key recommendations:

-- Advertisement --

Strategic ownership for driving change: the CMA recommends that HM Treasury takes strategic ownership for driving and overseeing the necessary system-wide changes to actively shape the market (recognising its overarching responsibility for infrastructure strategy across the public sector, and its ability to deploy the necessary convening powers and levers within the UK Government).

A clear plan for the sector: the UK Government, in consultation with the Scottish and Welsh Governments and the Northern Ireland Executive, should publish a strategic sector plan for civil engineering in the road and rail sector and report annually on progress.

Credible long-term pipelines: multi-year funding and clearer forward project pipelines to give firms the confidence to invest in skills, capacity and innovation.

Procurement designed for long-term value: improving how projects are scoped, procured and delivered to promote competition, lower costs, support investment and incentivise innovation.

Building public-sector capacity: tackling capacity and skills shortages in procuring authorities through strengthening capability, shared expertise and smarter joint procurement.

Implementing these combined changes would increase competition, boost productivity, and open up opportunities for expanding UK firms. It would also accelerate project completion and maximize the economic impact of public investment. If rolled out systemically, these measures could transform public procurement into a major engine for growth.

The CMA is prepared to assist the UK and devolved governments with implementing these proposals. Meanwhile, the watchdog is progressing its wider review of public procurement across the industrial strategy's priority sectors, alongside ongoing work to counter public sector bid-rigging.

Sam Gould, Director of Policy and External Affairs at the Institution of Civil Engineers, said: "The recommendations in today’s CMA study align with many the ICE has championed. We’re particularly happy to see the CMA recommend mandatory use of the Construction Playbook. This will help enable faster infrastructure delivery. We’re also glad the CMA has echoed the ICE in saying that the Treasury should oversee driving system-wide change, with the support of NISTA.

"While the current recommendations only apply to rail and road, embedding them could provide useful insight and lessons for other sectors. The government should consider applying them more broadly. Now the government must accept and enact the recommendations so civil engineers and infrastructure professionals can get on with delivering the infrastructure the UK needs."

Ben Goodwin, Director of Policy and Public Affairs for the Civil Engineering Contractors Association, stated: "By calling for the UK and devolved governments to set a strategic direction for infrastructure, the CMA’s recommendations show a clear path towards greater pipeline visibility, more efficient procurement, and better outcomes for businesses, communities, and the wider economy.

"We strongly support the CMA’s conclusion that reforming the civil engineering market can deliver a powerful multiplier effect: improving value for money from public investment, strengthening supply chain confidence, and making the UK a more attractive place to invest.

"We look forward to working with our members, clients, and industry stakeholders to ensure this report acts as a catalyst for the reform that is needed - supporting growth, creating jobs, and delivering world-class infrastructure for the 21st century."

The recommendations have been formally submitted to the UK and devolved governments, with the CMA writing directly to metro mayors and key Cabinet members across the UK and devolved nations.

The UK Government has pledged to deliver an official response to the CMA's recommendations within 90 days.

Additional analysis and guidance regarding public procurement and market shaping from the CMA will be published later this year. Further details can be found on the civil engineering market study webpage.