NEC users set to benefit from UK’s record £700bn major works pipeline

The UK’s Infrastructure and Projects Authority (IPA) published its National Infrastructure and Construction Pipeline 2023 and accompanying analysis in February 2024 (IPA, 2024). This identified that a record 660 major public and private sector projects and programmes are planned, with £164 billion investment by 2024/25 and £700–775 billion over the next 10 years. The majority is likely to be delivered using NEC contracts.

The major projects pipeline confirms the continuing high level of investment in Britain’s economic and social infrastructure, with the associated opportunities for increased employment, more sustainable solutions and technological innovation. The analysis also stressed the importance of continuing to improve infrastructure delivery in line with IPA’s Transforming Infrastructure Performance (IPA, 2021).

NEC contracts have and will continue to play an important role as an enabler of the government’s construction priorities, helping both private and public industry to deliver value and drive change through innovation, digitalisation and sustainable construction.

Driving change

A key driver for change will be the adoption of modern digital approaches and technologies. The pipeline analysis shows that already some £64 billion of major projects over the next two years will be delivered harnessing the benefits of Modern Methods of Construction (MMC).

NEC users will know that NEC contracts enable engagement of key members of the supply chain from design through to off-site fabrication and on-site construction and installation (Ng, 2019). NEC has helpfully developed a practice note to explain how the NEC4 suite of contracts can be used to support the use of MMC in more detail (NEC Contracts, 2018).

Analysis of the 2023 pipeline showcases the successful delivery of His Majesty’s Prison Fosse Way at Glen Parva, which used off-site manufacturing for a significant part of the construction. This is the second new prison to be built as part of the Ministry of Justice’s new prisons programme and was delivered under an NEC3 Engineering and Construction Contract (ECC) (Fullalove, 2023).

Procuring net zero construction

The pipeline analysis also focused on the importance of achieving net zero greenhouse gas emissions, improving energy security and putting digitalisation at the forefront of planning.

NEC contracts can help the UK to achieve its net zero targets through enabling a collaborativeand integrated approach to design and procurement (Klein, 2022), and the climate change secondary Option X29 gives users the option to make this an explicit contractual requirement.

Securing economic growth

Despite the apparent strength of the planned pipeline, it is still a challenging environment for infrastructure projects. Although inflation is now easing, recent spikes in energy and material costs have highlighted the need to ensure suitable provision for inflation within construction contracts. NEC users can adopt secondary Option X1 on price adjustment for inflation to help them manage and mitigate the impact across their project or programme (Patterson, 2022).

Also key to being able to deliver the challenging projects pipeline is having a ready workforce with the right skills and experience. The NEC contract suite’s flexibility enables additional bespoke requirements to become contractual, such as delivery of apprenticeships, training and local employment opportunities – which in turn will help improve productivity and generate further growth. 

References

• Fullalove S (2023) UK alliance starts on first of four NEC4-procured prisons. NEC Newsletter 123 (January 2023): 1.
• IPA (2021) Transforming Infrastructure Performance: Roadmap to 2030.
• IPA (2024) National Infrastructure and Construction Pipeline 2023.
• Klein R (2022) How NEC contracts can help us to achieve net zero carbon emissions. NEC Users’Group Newsletter 120 (September 2022): 2.
• NEC Contracts (2018) NEC4 Practice Note 4, September 2018, Offsite modular construction.
• Ng CK (2019) Facilitating digital collaboration in NEC4. NEC Users’ Group Newsletter 96 (February 2019): 5.
• Patterson R (2022) How to use NEC secondary Option X1 on price adjustment for inflation. NEC Users’ Group Newsletter 118 (May 2022): 8.