A decade ago, only a 10th of the British population went to university. Today, the proportion has risen to one-third, and the Labour government's policy is to push it up to half. That means that, although funding per student is falling, the total amount of money in the sector has increased steadily, and government spending plans will ensure it continues to do so. British universities spent £973m on new buildings and refurbishments and £446m on maintenance in the past financial year, and the amount this year will be higher.
A change in funding policy this year will create even more work for the construction industry. Until recently, the government gave university departments a fixed contribution to teaching costs, no matter how many students they admitted. But from now on, it will award the money on a per capita basis, so successful departments will be able to increase their income by attracting more students, and spend their gains on the expansion plans that the extra numbers will necessitate. Conversely, less popular departments will suddenly feel the pain of smaller teaching grants, which could force them to merge or rationalise, creating the demand for even more work.
The growing student population needs somewhere to live as well as lecture halls and libraries. After the double whammy of the government's abolishing grants and introducing tuition fees, many British students are making ends meet by staying at home and attending a nearby university. However, an influx of overseas students is keeping up demand for bed spaces: there are now 17,000 students from China alone, where applications to British universities rose 77% last year. There are 300,000 bed spaces for students today, but universities need at least 100,000 more, according to Clive Crawford, managing director of Jarvis University Partnerships Programme.
In addition to new build, there are plenty of opportunities for maintenance. One example is a project that Jarvis undertook for Reading University; building nearly 400 units of student accommodation, and operating them over a 30-year contract, at the end of which ownership reverts to Reading.
Universities aren’t worried if long-term savings come at a price of higher capital costs in the short term
The other boom area is science and technology. The Science Research Investment Fund (SRIF), launched in July 2000, is pumping public money into universities, with prestigious institutions in Cambridge, London and Oxford taking the lion's share (see "In the money", page 44). One beneficiary has been YJL subsidiary Walter Lilly, a specialist contractor that broke into the university sector three years ago. The firm's business development director Paul White says: "Historically we've had a presence in the science sector, particularly with pharmaceutical companies. But after their spending was cut back by mergers, we needed to branch out."
Walter Lilly won its first university project with the help of a guaranteed maximum price bid for the Genome Stability Centre, a laboratory at Sussex University. White says: "External funders allocate a fixed amount, not a penny more, not a penny less – so prices for university work have to be very robust."
Accommodating clients' unpredictable search for funds is a key factor in winning work in higher education, as Edward Cullinan Architects found out on its latest project for Cambridge University. When it first started work on the Centre for Mathematical Studies, its brief was to showcase the architectural plans in a fund-raising brochure to sell the project to wealthy donors in America. They did that successfully, and millions came in from Bill Gates and Nick Corfield, a Cambridge maths graduate who made his fortune in Silicon Valley. But the fund-raising wasn't over, and Cullinan designed the centre in such a way that the more money it raised, the more it could build: a central core links seven pavilions, including one that was added to the design mid-way through construction when more money came in.
Delivering bang on time is just as important as staying exactly on budget. Charles Johnston, senior partner of quantity surveyor firm MDA, says: "Timing is critical: if you hand a building over to a university three weeks after the start of term, it's no use to them." And there's a warning from Andrew Smith, head of estates at the Higher Education Funding Council for England: "You need a certain amount of patience in dealing with higher education institutions, because they tend to operate in quite a democratic, committee-based way." If you are trying to break into the sector, a good way to start is by lobbying directors of estates.
The other way to universities' hearts is, increasingly, to show off your green credentials. YJL chief executive Roger Feast says: "They're looking to use materials that won't harm the environment, and they care more about sustainability issues than the average client. They're very intelligent people." Universities have a financial incentive to go for high-performance, energy-efficient buildings. They operate on tight budgets and, unlike private companies, they care more about long-term financial viability than short-term results. So they aren't worried if long-term savings come at a price of higher capital costs in the short term.