The 9th edition of the “Healthcare Construction Market Report – UK 2021-2025” covers changes the market has undergone after the Covid-19 pandemic and Brexit. The report covers market influencers, main suppliers and contractors, procurement and analysis of construction pipeline.

This report reviews the healthcare construction market, looking at the recent performance, trends, influences and forecast performance. Historical and expected future construction output is analysed by regional as well as healthcare facility breakdown.

The UK healthcare construction market declined by 37% in the past five years. The increased demand for healthcare provisions and facilities during the pandemic positively stimulated the market in 2021. While growth is forecasted in the next five years, the market size is not expected to fully recover from the decline in the past five years.

A key driver for the market is the NHS’ future vision, structure and funding for capital projects. In October 2021 Budget and Spending Review it was announced that NHS England budget will grow from £136.1bn in 2021/22 to £162.6bn in 2024/25, average real terms increase of 3.8% per year. Other political, economic, legal and environmental influences on the market are discussed in addition to NHS in England, Wales, Scotland and Northern Ireland and the private and acute healthcare sector.

As the Government has decided to axe PFI (Private Finance Initiative Schemes) and PF2 (Private Finance 2) for infrastructure projects; going forward, it is confirmed that all existing PFI contracts will be honoured, some of which will run into the 2040s. Currently the main healthcare construction procurement programmes in the UK are NHS LIFT/ExpressLIFT, the HUB Initiative Scotland, Frameworks Scotland, ProCure22 (until the end of June 2022), ProCure23 (starts in July 2022), NHS Building for Wales Frameworks.

Between 2016 and Q3 2021, in terms of the type of contracts awarded, public hospitals accounted for the largest share, followed by surgeries, health and medical centres. In 2019 before the Covid-19 pandemic, contract awards for all types of healthcare facilities declined over the previous year’s levels. In 2020, contract awards for private hospitals, surgeries, health and medical centres and veterinary surgeries and hospitals increased significantly while the value of contract awards for public hospitals remained stable. Q1-Q3 2021 activity in contract awards suggests that it will be a strong year in healthcare specifically in terms of public hospitals and hospices, nursing and psychiatric homes. Going forward, output from public hospitals and surgeries, health and medical centres will continue to dominate the total construction output in the healthcare sector.

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and also provides access to our index of over 25 UK-based firms specialising in construction market research

Key Areas Covered by the Report

Market overview

  • Market size by value 2016 to 2021, rates of change.
  • Market overview including leading contractors’ market shares.
  • Construction pipeline by healthcare facilities and regions.

Market Influencers and Drivers

  • Main influences that drive the healthcare sector including detailed PESTLE analysis.
  • Analysis including NHS and the private and acute healthcare sector.
  • NHS Long Term Plan and NHS Five Year Forward View
    Procurement changes after Brexit and cancellation PFI and PF2.
  • NHS investment
  • Impact of Covid-19 on use of modern methods of construction in the healthcare sector.
  • New framework for modular buildings by NHS Shared Business Services

Healthcare facilities

  • The report covers six types of healthcare facilities: public hospitals; private hospitals; surgeries, health and medical centres; hospices, nursing and psychiatric homes; secure hospitals; veterinary surgeries and hospitals.

Market Prospects

  • In the NHS, the shift of focus away from hospital-based provision towards a community-based model of care continues. This transforms primary care services in line with the NHS Five Year Forward View and the NHS Long Term Plan which creates opportunities for smaller value projects to provide extensions, reorganization and refurbishment of existing primary care facilities.
  • Construction output from public hospital schemes and from smaller value projects for the surgeries, health and medical centres will continue to dominate the total output in the healthcare sector.
  • Following the levels of planned government investment in the healthcare sector until 2025, the gap between the public and private sub sectors is expected to grow.

Supply and Distribution

  • Suppliers and contractors of significant projects are identified and detailed contractor profiles along with company turnovers are provided.

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