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Council construction spending starts to rise

Published by Glenigan on 25th September 2019 -

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Spending by the leading local authority clients on construction has more than doubled over the past year.

The government claims an “end to austerity’ and pledged greater state spending, but local authorities appear to have pre-empted this according to Glenigan’s construction market analysis.

There are 38 councils in Glenigan’s latest ranking of the construction industry’s top 100 clients for the 12 months to August 2019. These public authorities are behind £6.8 billion-worth of construction projects, which represent 30% of the spending by the industry’s top 100 clients.

In August 2018, there were only 22 councils amongst the industries top 100 clients. Their aggregate spend was just under £3.3 billion and this only represented 13% of spending by the industry’s top 100 clients.

Leading clients

Part of the reason for this rise is a shift to larger flagship projects moving to site.

In the most recent period, the average construction project awarded by a council in the top 100 clients was valued at £15.1 million according to Glenigan’s research. A year ago, that measure was £12 million.

The biggest spending client in the last year is Birmingham City Council, which is behind a swathe of projects for the 2022 Commonwealth Games, including the £350 million athletes’ village (Glenigan Project ID: 18129238)

The next biggest local authority client is Manchester City Council with nearly £400 million-worth of construction contracts let in the last year. These include the £330 million refurbishment of the Grade I-listed Manchester City Hall (Glenigan Project ID: 16254526).

The UK arm of Australian group Lendlease is building both these projects.

London upswing

Another reason behind the recent upturn is an increase in spending by local authorities in London.

A year ago, spending at the capital’s 32 boroughs and the City of London was down 11% and the biggest spending council in the Top 100 was the Greater London Authority (GLA).

In the most recent period, GLA is the fourth biggest council spender after awarding 8% less construction work by value compared to a year ago. In contrast, spending by London boroughs is rising.

Including the GLA, the number of London councils amongst the industry’s top 100 clients has tripled over the past 12 months.

Over this period and including the GLA, the 22 London councils in the top 100 awarded £2.3 billion-worth of construction work.

Provincial improvement

There has also been an increase in spending outside London, where the remaining 24 of the 38 councils in the top 100 located. Outside of Birmingham and the North West, flagship projects are also driving the rise in spending.

Leeds City Council is the fifth biggest spending local authority on construction according to Glenigan’s market data. Major council funded projects in Leeds include the city’s £90 million public transport investment programme.

The City of Edinburgh is also amongst the top 10 council clients after giving the green light to a £90 million tram extension from York Place to Bellhaven (Glenigan Project ID: 17228056).

Big projects have helped inflate the latest headline spending figures but with austerity officially over – according to the government – local authority spending may be on the way up again.


Ian Bellamy

Glenigan is the trusted provider of construction project sales leads, industry data, analysis, forecasting and company intelligence. Glenigan combines comprehensive data gathering and exhaustive research with detailed statistical modeling and expert analysis .

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