UK Civil Engineering Market Under CMA Scrutiny as Regulator Turns Up Heat on Construction Sector

The UK’s Competition and Markets Authority (CMA) on 19 June 2025 launched a market study into the supply of public roads and railways across the United Kingdom. This market study, together with recent investigations into the construction sector and implementation of the Procurement Act 2023, reflects a continued focus on the construction sector. Clients operating in the UK construction markets should be aware of these recent developments to ensure compliance and mitigate risks.

WHAT IS A MARKET STUDY?

A market study is a tool under the Enterprise Act 2002 used by the CMA to assess whether features of a market are distorting competition. It does not require evidence of unlawful conduct and typically focuses on systemic or structural issues. A study formally begins with the publication of a market study notice, which triggers a statutory timeline of 12 months within which the CMA must publish its final report.

Possible outcomes include: no action; consumer-focused guidance (e.g., raising awareness); encouraging firms to take voluntary action (e.g., self-regulation); recommendations to the UK government; competition or consumer law enforcement action; undertakings in lieu of a reference; or a formal market investigation reference.

CMA’S MARKET STUDY INTO CIVIL ENGINEERING IN RAIL AND ROAD

The CMA’s review of civil engineering for roads and railways underlines the UK government's strategic focus on economic growth and its substantial investment in critical infrastructure. The market study will examine the design, planning, construction, enhancement, renewal, and maintenance aspects of public road and railway projects in the United Kingdom. Its objectives are as follows:

• Enable public authorities to access and assess the right information to make well-informed procurement decisions in roads and railways.
• Improve collaboration between the public sector and the market to ensure projects are delivered on time, to a high standard, and within expected budgets.
• Identify and address procurement, planning, or regulatory barriers that unnecessarily restrict a firm’s ability or incentive to enter, expand, invest, or innovate in this market.
• Assess how changes to current market practices could better incentivise civil engineering firms to contribute to UK productivity and growth.

It is important to note that market studies are designed to inform policy and do not give the CMA direct remedial powers to intervene in the market (unlike a market investigation). However, its conclusions are likely to shape future policies and actions and can result in a market investigation (which CMA does not expect to be likely in this case) and wider changes in the sector.

At launch, the CMA indicated that it may recommend changes to existing processes aimed at reducing barriers to entry and expansion, improving operational efficiency, and supporting better decision-making through more accurate budgeting and delivery time estimates.

WHAT'S EXCLUDED FROM THE MARKET STUDY?

The market study will not cover privately procured roads, small-scale maintenance activities, or ancillary elements such as telecommunications. It also excludes areas that have been previously reviewed, including the HS2 project and railway signalling (recently examined by the Office of Rail and Road). In addition, tram networks, all light rail (including underground rail systems), and upstream raw materials used in road and railway construction are outside the scope of this study.

BROADER CRACKDOWN ON ANTI-COMPETITIVE PRACTICES IN CONSTRUCTION SECTOR

The civil engineering market study is part of the CMA’s broader focus on both public procurement and the construction sector, two areas that are interlinked in its agenda.

The authority has explicitly stated a "particular focus" on public procurement within its Annual Plan for 2025–2026, recognising that public expenditure in this area accounts for approximately a third of UK public spending. Furthermore, rail and road (excluding the HS2 project) accounted for 70-75% of government expenditure on economic infrastructure in 2022, [1] making the civil engineering sector particularly significant.

This focus builds on recent enforcement activity in the construction sector, where anti-competitive behaviour has impacted also public sector:

• In March 2023, the CMA imposed nearly £60 million in fines on 10 construction firms active in the supply of demolition services and asbestos removal services for bid-rigging activities across both public and private contracts and disqualified four directors.
• In February 2024, the CMA’s final report on the housebuilding market in Great Britain found that a complex planning system and the limitations of speculative private development are driving the persistent under-delivery of new homes. In addition to its reform recommendations, the CMA has also opened an investigation into suspected anti-competitive information sharing by eight major housebuilders.
• In December 2024, the CMA launched an investigation into suspected bid-rigging roofing and construction service companies in relation to a government fund for improving the condition of school buildings.
• In January 2025, the CMA closed its investigation into suspected anti-competitive conduct in relation to the supply of chemical admixtures and additives for use in concrete, cement, mortars, and related construction products in the UK, on administrative priority grounds.

Further strengthening the CMA's efforts is the entry into force of the Procurement Act 2023 on 24 February 2025. The legislation introduced explicit grounds for exclusion from public tender opportunities based on cartel infringement.

NEXT STEPS

The convergence of the CMA's market study, its enforcement actions, and the new Procurement Act 2023 puts businesses in the civil engineering and broader construction sectors under the spotlight.

• The CMA is inviting feedback on the scope and focus of the market study by 17 July 2025. Engagement opportunities will continue throughout the market study.
• The CMA will gather evidence until November 2025, aiming to publish an interim report by that time and a final report by April 2026.
• Firms active in the civil engineering sector should begin reviewing their procurement strategies and how they interact with public authorities. Key areas to consider include the following:
  • Barriers to bidding within the public infrastructure market.
  • Pricing mechanisms in public contracts.
  • Supply chain structures.
  • Information-sharing practices that could raise competition concerns.
  • Readiness to respond to potential regulatory or process reforms recommended in the CMA’s final report.
  • This is also a timely opportunity to provide input to the CMA—especially on past project experiences, procurement challenges, or innovative approaches.