UK environmental consulting to be worth over £2 billion in 2021

The UK environmental consulting market is likely to shrug off Brexit anxieties to reach a size of £2 billion by 2021 – a year earlier than previously anticipated. A new study has found that while growth in the market has seen a notable slowdown since the 2016 referendum, global trends that have buoyed environmental consulting demand worldwide will continue to boost business in the UK, even after it withdraws from the EU.

Like the rest of the UK’s £11 billion consulting market, environmental consultancy has continued to thrive in Britain, regardless – or possibly because – of Brexit anxieties. As was reported last year, the environmental consulting market had enjoyed a decade-long growth spurt, reaching its highest ever value in 2017. The sector had already surpassed its pre-crisis level of business the year before, but according to industry experts at Environmental Analyst, growth had slowed significantly in the wake of 2016’s shock referendum result, which saw the UK commence proceedings to exit the European Union.

A year later, Environmental Analyst appears to have recalibrated its estimations of the market, and now reports that while growth did indeed slow drastically between 2016 and 2017, it rebounded to even higher levels in the following year. The market grew by more than 6% leading into 2018 – some 2% more than Environmental Analyst had previously anticipated – leaving the segment worth £1.7 billion going into 2019. According to the researchers, despite continued anxiety surrounding Brexit throughout that year, investment in environmental consulting remained steady at more than 5%, estimating the market is now worth close to £1.9 billion.

The study suggests that the UK’s environmental consulting scene will continue to enjoy steady growth in the coming years too. Upgrading last year’s forecast, Environmental Analyst now expects the sector will break the £2 billion barrier in 2021 – a year earlier than it predicted in its last report.

Commenting at the study’s release, Research Manager Ross Griffiths said, "Despite the concerns and worries that have dogged this sector since the UK voted to leave the EU in 2016, our latest figures show environmental consultancies have been incredibly resilient to the slowing economy. While optimism is not quite where it was prior to the Brexit vote, continued spending and momentum in sustainability is helping it grow year-on-year."

One of the driving forces behind the surge in the environmental consulting market’s worth seems to have been a major uplift in public sector spending. Environmental consulting services saw a boost of 18% over the course of 2018/19, as the Government sought to tap external expertise to support infrastructure projects, Brexit preparations, Environment Agency frameworks, international development programmes and under-resourced local authorities.

Overall, the public sector is the second largest client of the UK’s consulting industry, behind financial services, so this upturn is hardly an outlying trend. In terms of the environmental consulting segment specifically, spending from the public sector has been gradually increasing since 2015. Having gone through the floor during the initial years of austerity, 2015 saw spending on such services return to positive growth of just under £20 million, while by 2017 this had moved closer to £30 million. 2018 saw the figure boom by over £60 million.

The public sector now accounts for 22.5% of all environmental consulting spending, then, though this still remains down from the 33% market share held in 2009. However, with projects like Highways England’s first road investment strategy, Network Rail’s fifth control period, the UK’s drive to deliver 300,000 homes annually and the recently green-lit construction of HS2 – now forecast to cost in excess of £100 billion to build – this could soon change. While the Government remains keen to cut spending to many public services, it seems it is unwilling to neglect infrastructure which businesses depend on any longer.

"While it is too early to say that austerity has completely come to an end, it is clear that government departments, agencies and local authorities are reaching out to consultants more and more to support their environmental programmes," explained Griffiths. "Environmental consulting firms are stepping in to help the UK’s under-resourced public sector deliver their committed and statutory environmental obligations and navigate the post-Brexit regulatory framework."