Mace Consult has warned that the government’s devolution plans could increase delivery complexity without guaranteeing that infrastructure projects reach site.
The consultancy said funding certainty and realistic programmes would be critical as the government seeks to move investment decisions away from Whitehall. Its latest quarterly market report described delivery as a “significant challenge” amid fragile confidence in the construction sector.
Local priorities could conflict
The report said: “Devolution has the potential to add further complexity if local priorities do not align with those of Whitehall departments and resolving this friction will be key to the policy’s success.”
Ceri Evans, Mace Consult’s global director of cost and commercial management, said devolution, planning reform and changes to public-sector appraisal methods could strengthen the pipeline for housing, transport and public services.
But she added: “Policy ambition alone will not put projects on site.”
Prime minister Andy Burnham has made devolution a central part of his administration, with the government expected to publish a white paper and fiscal devolution roadmap alongside next week’s Budget.
Construction market remains under pressure
Mace Consult said construction output was 1.6% below the level recorded a year earlier. New orders fell by 11.8% in the second quarter, marking a third consecutive quarterly decline, while material price inflation reached 6.4% in August—the highest rate since March 2023.
Despite the market weakness, the consultancy said there was a “strong argument” for reducing its tender price forecasts. It has instead left them unchanged at 3.5% for national real estate, 4.5% for national infrastructure and 3.5% for London.
The report cautioned that the lowest tender might come from contractors with insufficient workloads seeking to secure projects, rather than from the strongest delivery proposition. Mace Consult said its forecasts faced downside risks if the market weakened further, alongside renewed upside risks from higher energy prices.