£5 Billion on the Table: CMA Market Study Signals Fundamental Reset of Road and Rail Procurement

Introduction

On 21 May 2026, the UK Competition and Markets Authority (CMA) published the findings of its civil engineering market study. This study examined whether the market for public road and rail infrastructure is working effectively, covering approximately £19 billion of public sector expenditure in 2023/24 (excluding High Speed 2). The market study was launched in July 2025 and has involved extensive engagement with contractors, procuring authorities, and the UK and devolved governments. The CMA concluded that the market was underperforming, with potential efficiency savings of 10–25%, amounting to approximately £2 to £5 billion per year to be made.

The study was carried out in line with the UK Government's strategic steer to the CMA and the CMA's own 2026–2029 strategy, which frames the CMA’s role as identifying practical opportunities to strengthen competition and support growth and investment in UK infrastructure. While the current recommendations apply only to road and rail, the CMA has confirmed they could provide lessons for other sectors. This aligns with the broader policy direction signalled by the King’s Speech, delivered on 13 May 2026, which placed infrastructure investment squarely at the centre of the Government’s legislative programme, with His Majesty stating that “the United Kingdom’s economic security depends upon world class infrastructure”.

Key Findings and Recommendations of the Market Study

The CMA found that the market is systematically underperforming: costs are high and rising in real terms, cost and time overruns are common, quality is variable, and innovation is constrained. The CMA attributes these problems to the structure of public procurement in particular, fragmentation across hundreds of bodies with no clear strategic direction, short-term funding cycles that undermine long-term planning, barriers to entry for smaller firms, capability gaps in procuring authorities, and inappropriate risk allocation. The Chief Executive of the CMA described this as "an opportunity for systemic change" requiring "strong central coordination, and a reframing of road and rail procurement as a lever for growth and innovation". In this context, the CMA has made 19 recommendations to the UK, Scottish, and Welsh governments and the Northern Ireland Executive, which focus on:

1. Strategic ownership: HM Treasury to take strategic ownership for driving system-wide change, with the National Infrastructure and Service Transformation Authority playing a central coordination role.
2. A clear plan: Publication of a strategic sector plan for civil engineering in road and rail, with annual progress reporting.
3. Credible long-term pipelines: Multi-year capital budgets (minimum three years) and clearer forward project pipelines to give firms confidence to invest.
4. Procurement for long-term value: Mandatory compliance with the Construction Playbook, standardisation of designs for common structures, and reducing over-compliance with technical standards.
5. Building public-sector capacity: Strengthening capability, shared expertise, and smarter joint procurement to address skills shortages in procuring authorities.
6. Reducing regulatory barriers: Simplifying and streamlining regulatory processes to support project delivery, lower barriers to entry and expansion, particularly for smaller firms, and to accelerate innovation, while protecting essential safety outcomes.

While the current recommendations apply only to road and rail, the CMA has confirmed they could provide lessons for other sectors and that the Government should consider applying them more broadly.

In a recent speech, a senior official at the CMA confirmed that the regulator’s work on public procurement across priority sectors of the industrial strategy continues in the context of competition being "a means to real-world outcomes driving growth, improving household prosperity and supporting a more resilient, dynamic UK economy". This aligns with the broader policy direction signalled by the King’s Speech which announced legislation to enable roads to be built at pace (the Highways (Financing) Bill), to deliver Northern Powerhouse Rail, and to reduce regulatory burdens through innovation (the Regulating for Growth Bill). Its wider themes of using public investment to shape markets and attract private capital, and deploying the power of an active State in partnership with business, provide the strategic framework within which the CMA’s recommendations will be received.

Next Steps and Key Takeaways

The UK Government has committed to responding within 90 days. The CMA has written to key Cabinet members, devolved governments, and metro mayors, and further analysis on public procurement and market shaping will follow later this year. The alignment between the CMA's strategic direction, the King's Speech legislative programme, and the regulator's own evolution suggests that implementation momentum may be stronger than for previous reform proposals in this space. Businesses involved in infrastructure projects should therefore:

• Prepare for mandatory Construction Playbook compliance. The CMA recommends HM Treasury enforce Playbook adherence with multi-year capital budgets and streamlined accreditation. Contractors and procuring authorities should review their current alignment and address gaps ahead of potential mandates.
• Engage during the 90-day response window. The Government must respond to the CMA’s recommendations within 90 days. This is a critical window for stakeholders to shape implementation through submissions, trade body engagement, or direct dialogue with policymakers.
• Monitor expansion to other sectors. The CMA has signalled that its recommendations may extend beyond road and rail to other infrastructure sectors. Organisations in water, energy, digital, and other public infrastructure should track developments and consider early adoption of the principles.

We would be happy to discuss the implications of the CMA's market study for your organisation.