The Competition and Markets Authority (CMA) has published the findings of its market study into road and rail infrastructure and is recommending actions to drive down costs and drive up innovation and productivity.

Following 11 months of in-depth analysis and engagement across government, procuring authorities and businesses, the CMA’s market study on public road and rail infrastructure highlights the cost of historic approaches and the scale of the opportunity for reform.

The CMA is recommending government embraces a more strategic and coordinated approach to delivering road and rail infrastructure with a clear plan for the sector. Alongside recommending concrete actions in road and rail, the CMA believes that the lessons learned have broader applicability across 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.”

The report found around £19bn of taxpayers’ money was spent on public road and railway infrastructure in 2023/24 - excluding HS2. But it said these markets have long underdelivered on productivity, innovation and the speed of delivery.

External research, highlighted in the CMA’s report, shows UK and devolved governments could potentially save up to £5bn a year by addressing the challenges in the market, while also reducing delivery times, increasing innovation and investment and supporting UK firms to grow and compete.

Central to the report is a call for HM Treasury to take strategic ownership for driving and overseeing changes to actively shape the market.

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

Credible long-term pipelines, procurement designed for long-term value and building public-sector capacity was also highlighted.

Marie-Claude Hemming, policy director at the Association for Consultancy and Engineering (ACE), said: “This is an important piece of work from the CMA and it should be treated as a serious opportunity for reform. The report reflects many of the concerns our members have raised for some time about the way the civil engineering market is structured and how that affects cost, delivery and innovation.

“What matters now is implementation. If government can continue to provide clearer long-term direction, strengthen procurement capability and remove unnecessary barriers to innovation, our sector will be better placed to deliver the infrastructure the country needs and the long-term value the public expects.

“To this end, ACE is calling on government and its delivery bodies to move quickly from diagnosis to delivery, with clear ownership and timescales for reform. That includes putting in place multi-year funding settlements, building on the infrastructure pipeline, improving procurement capability across public authorities, standardising processes where appropriate and creating a regulatory environment that supports innovation and SME participation rather than slowing it down.

“We want to work with government, clients and partners across the supply chain to support the implementation of the CMA’s recommendations and help build a more efficient, competitive and innovative civil engineering market once and for all.”

The CMA said taken together, these changes would strengthen competition in the sector, increasing productivity and opportunities for UK scaleups. They would also speed up delivery and help ensure public investment works harder for the economy. Applied more systemically, they could help public procurement become a major driver of growth.

Recommendations have been made to the UK and devolved governments, with the CMA writing to key Cabinet members within the UK Government and devolved nations, as well as metro mayors.

The UK Government has committed to responding to CMA recommendations within 90 days.

Click here to read more about the report.