Health construction sector revives

Source: Glenigan

Top client

The Department of Health is now the construction industry’s biggest client. In the 12 months to July 2022, the DoH awarded contracts for construction worth a total of £2,192 million and was ranked in first position in Glenigan’s rankings of the industry’s Top 100 clients.

This total is 7% up on the same stage a year ago, when the DoH was ranked second behind the Department of Transport.

Recent awards include Tilbury Douglas’ appointment to build a £77.3 million extension to Dorchester Community Hospital in Dorset where work is due to start in the New Year (Project ID: 20397024)

Proposals for a £58 million emergency department at Queen Alexandra Hospital in Portsmouth (Project ID: 21265027) is due to start work in September after IHP Integrated Health won the contract.

IHP rise

The increase in medical sector spending has propelled IHP Integrated Health, which is a joint venture between Sir Robert McAlpine and VINCI, into the Top 25 of the industry’s contractors.

The JV was formed in 2003 and has worked on more than 200 health projects since then with a total value of £1.9 billion. Glenigan’s research shows that IHP has won £591.5 million-worth of work in the 12 months to July 2022.

Recent successes for IHP include a £90 million National Rehabilitation Centre in Loughborough, where work is due to start in December according to Glenigan’s industry intelligence (Project ID: 20415869).

This summer, IHP was also awarded the contract to build the £105 million North View Mental Health Inpatient Unit scheme at Prestwich in Greater Manchester (Project ID: 19271497).

Plans afoot

More health work is coming through the pipeline. The value of health projects given detailed planning permission in the three months to July 2022 has leapt by 33% according to Glenigan’s construction industry research.

Glenigan economics director Allan Wilén comments: “Encouragingly, the value of underlying health detailed planning approvals has improved progressively over the last four years with growth of 3% in 2019, 36% in 2020 and 9% in 2021 and into 2022.

“Additional government funding promised in the Spending Review will boost sector activity towards the end of 2024.”

The largest amount of work approved by value is in London including a £300 million redevelopment of Whipp’s Cross Hospital in the east of the capital (Project ID: 20102249), and the South West, where a £42 million dementia nursing home in Bristol (Project ID: 17262688) and a £32 million Wellbeing Centre in Plymouth (Project ID: 21449924) both now have planning.

Value of Planning Approvals by Region