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Government short-term construction pipeline grows to £30bn

The value of the government’s construction pipeline over the next two years has risen by more than a third to £30 billion

The latest update to the pipeline, published following the government’s spending review in June, showed there will be a total of £30.1 billion worth of projects in 2013/14 and 2014/15.

According to the AJ’s sister title Construction News, the previous pipeline updates in May 2013 and November 2012 had comprised £19.2 billion of schemes for that period.

Overall the latest update showed 1,047 projects worth £109.2 billion from 2013/14 to beyond 2020.

Spending includes £61.9 billion on transport, £14.2 billion on nuclear decommissioning, £5.8 billion on housing, £7.5 billion on defence construction schemes, £4.8 billion on flood defences and £4.9 billion on education projects in that time.

Cabinet Office minister Chloë Smith said: ‘Regularly updating this information and providing construction suppliers with much earlier visibility of future opportunities within government gives UK businesses the knowledge they need to plan, get ahead of the game and grow.’

Research on the pipeline of government construction projects published by Glenigan found 997 projects worth £51.78 billion in 2013/14 and 2014/15.

The study, published in May, reached a higher total than the government’s pipeline because it included projects at earlier stages where funding had not been finalised.

At the time Glenigan said there were 1,600 government projects with a total value of £114 billion at various stages of development between 2013 and beyond 2020.

HS2

The government’s latest construction pipeline showed that it expected to spend £21.37 billion in the first phase of High Speed 2, which runs from London to Birmingham, and £21.18 billion in the second stage.

The pipeline said £2 billion would be spent from 2013 to 2016 and £16.5 billion between 2016 and 2020.

The figures in the pipeline are the same as the £21.4 billion for phase one and £21.2 billion for phase two, which include a total contingency of £14.4 billion, given in the Treasury’s Infrastructure Cost Review: annual report 2012-13 released last month.

A report by think-tank Institute for Economic Affairs, published yesterday, estimated that the costs could reach £80 billion if extra tunnelling or diversion work was needed to pacify opponents and if transport connections to the new railway and nearby regeneration projects were taken into account.

The report said the project was poor value for money compared with alternative transport projects and the government appeared to have gone ahead with HS2 for political reasons.

Jon Hart, partner at law firm Pinsent Masons, said neither the government nor the authors of the IEA report had fully explained how their numbers added up.

He predicted the debate over the costs and benefits of HS2 would increase in the run-up to the hybrid bill for the scheme going before parliament in November.

A spokesman for the Department for Transport said: ‘The headline £80 billion figure appears to have been arrived at by lumping together transport schemes that are not part of HS2 and in some cases are many miles from the line.

‘The report claims a theoretical and unsourced cost of £30 billion for these projects, although elsewhere admits many will never be built.’

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