CMA Raises Alarm Over Structural Failures in UK Roads and Rail Engineering Market

The Competition and Markets Authority has warned that the way Britain plans, funds and delivers road and rail infrastructure is fundamentally broken, creating inefficiencies that are slowing growth and driving up costs.

In interim conclusions from a major market review published today, the watchdog said the public civil engineering market suffers from chronic instability, overly cautious contracting models and regulatory complexity that together undermine productivity and long-term investment.

Road and rail schemes dominate government economic infrastructure spending, accounting for roughly three-quarters of total investment. During 2023–24 alone, public spending reached around £19bn across the two sectors, excluding HS2. Despite this scale, the CMA found that outcomes frequently fall short of expectations, with widespread delays and cost pressures.

Data analysed by the authority shows that the majority of road and railway projects fail to meet original delivery schedules, typically overrunning by more than a quarter of their planned duration. According to the CMA, this is symptomatic of deeper systemic weaknesses rather than isolated project failures.

At the heart of the problem, the watchdog argues, is a market environment shaped by short funding cycles and defensive procurement practices. Public bodies, facing uncertainty over future budgets and political priorities, tend to commission projects through narrowly defined, risk-averse contracts. While this approach may offer short-term certainty, it often limits flexibility, discourages innovation and shifts cost pressures elsewhere in the system.

The supply side of the market is also under strain. Firms seeking to deliver road and rail projects must navigate complex tendering processes, extensive compliance requirements and fragmented delivery models that rely heavily on subcontracting. The CMA said these conditions raise barriers to entry, reduce competitive pressure and make it harder for businesses to invest in new capabilities or scale up operations.

The authority found that public sector capability is another critical constraint. Many procuring bodies lack the specialist commercial and engineering expertise needed to act as informed clients, weakening their ability to design effective contracts or manage long-term supplier relationships. At the same time, inconsistent procurement policies and overlapping regulatory requirements add further friction and cost.

Together, these factors have created what the CMA describes as a self-reinforcing cycle: limited competition and innovation lead to higher costs and delays, which in turn encourage even more cautious behaviour by clients and funders.

To break that pattern, the watchdog is considering reforms aimed at reshaping how the market operates. Options under review include providing clearer and more stable investment pipelines, strengthening procurement skills within public authorities, recalibrating risk allocation to better reward innovation and streamlining regulatory and accreditation systems.

The CMA is inviting views on its interim findings until 28 January 2026 and expects to publish a final set of recommendations in spring 2026. Those proposals will be designed to support more reliable infrastructure delivery while improving value for money and market resilience.

The study is the first conducted using the CMA’s new analytical framework, which focuses on pace, predictability, proportionality and process. It builds on previous reviews by bodies such as the National Infrastructure Commission and the Infrastructure and Projects Authority.

Commenting on the findings, CMA chief executive Sarah Cardell said the performance of the civil engineering market has far-reaching consequences.

“Efficient transport infrastructure is essential to economic growth and everyday life,” she said. “Improving how this market functions is key to boosting productivity, connectivity and long-term prosperity across the UK.”

Industry representatives said the report reflects long-standing frustrations within the supply chain. Railway Industry Association chief executive Darren Caplan said the findings highlight the need for government to provide greater certainty and stability.

He added that without a clearer long-term pipeline and a more strategic approach to procurement, suppliers will continue to face barriers to investment and growth, with knock-on effects for cost, delivery and performance across the rail network.