The Competition and Markets Authority has concluded that the way the UK government plans, funds and procures road and rail civil engineering is fragmented and short-term, pushing up costs on roughly £19 billion of public spend recorded in 2023/24. The market study, published on 21 May 2026 and explicitly excluding HS2, puts the potential saving from implementing its recommendations at £2–5 billion a year — efficiency gains of 10–25% that the government must now answer within 90 days.

The CMA's findings echo the National Infrastructure Commission's 2024 report on why UK infrastructure costs exceed those of peer countries. The NIC attributed the gap to a lack of clear strategic direction, weak project clients and sponsors, inefficient consenting and a constrained supply chain. The CMA's own verdict on the buyer side is blunt: it is time to "drive down costs and drive up innovation and productivity."

Six failings dominate the report.

Fragmented, short-term funding. No unified procurement decision-making exists across UK road and rail. Decisions sit with central government, the devolved nations, Network Rail, National Highways and local councils. Stop-start budgets with changing pipelines force public authorities toward safer, smaller, near-term projects, which in turn discourages suppliers from investing in equipment, training and innovation. The CMA wants a credible multi-year capital pipeline of at least three years.

Poorly run procurements. Projects are often poorly scoped, suppliers are engaged too late, and evaluation design inflates bid costs while underscoring whole-life performance. Heavy amendments to industry standard contracts push risk onto suppliers regardless of who is better placed to manage it, and material post-award modifications import unnecessary procurement risk. The competitive flexible procedure introduced under the Procurement Act 2023 may ease some of these problems. Past-experience requirements systematically favour incumbents and squeeze out SMEs.

Public-sector skills gaps. Procuring authorities struggle to hire and retain procurement and engineering talent, lean heavily on consultants, and share too little knowledge between bodies — a finding that repeats the McNulty Report on rail from 2011.

Regulatory drag. Onerous technical standards, complex planning and permitting, and long lists of statutory consultees add delay and cost.

Accreditation overload. Overlapping pre-qualifications, often applied as blanket prerequisites rather than contract-specific requirements, hit smaller suppliers hardest.

No reward for innovation. Slow approvals and cautious culture, particularly in rail, mean suppliers face high risk for little reward, while tender evaluation rewards proven deployments over new approaches.

The recommendations

The CMA wants the Treasury to lead system-wide reform, using its cross-government leverage to align policy and delivery. It calls for a UK-wide road and rail civil engineering strategy, published and updated annually with the Scottish and Welsh governments and the Northern Ireland Executive, alongside multi-year budgets of at least three years. Procuring authorities should have headroom to award longer contracts that reward whole-life value rather than lowest sticker price, and the public sector should build stronger in-house capability and procure jointly rather than alone.

The government's response will land in a sector already in structural upheaval. Operations previously run under franchises and National Rail Contracts are being renationalised, and Great British Railways will emerge once the Railways Bill completes its passage, creating a more substantial — and likely centralised — procurement authority.

Rolling stock is the immediate test case. Maintenance accounts for around two-thirds of whole-life rolling stock costs, and a long-term rolling stock strategy is under development. With a single dominant user ahead, there are opportunities to align how rolling stock is purchased, financed, leased and maintained — provided compliance with the Procurement Act 2023 and genuine competitive tension are preserved.

The CMA has signalled that the same playbook will extend beyond transport, to energy, utilities and other capital-heavy public procurement. Its 2026–2029 strategy explicitly names public procurement and regulatory barriers as competition-policy levers for growth, and further work on public procurement and market shaping is expected later this year, alongside continued attention to bid rigging. Whether the £2–5 billion annual saving materialises depends on the government's response — and on whether multi-year pipelines and whole-life procurement move from recommendation to practice.