UK Infrastructure: A 10 Year Strategy

Hot off the press

The UK Government published its long awaited 10 year infrastructure plan last Thursday, 19 June.  Some of the headline items such as £14.2bn in support for Sizewell C and an extensive social infrastructure construction programme had already been announced by the Chancellor as part of the Government’s spending review on 11 June. In respect of other key areas, whilst the plan provides a glimpse of what is to come, it notes that further information will be published at a later date, so the wait goes on for the tangible detail.  With the publication today of the “The UK's Modern Industrial Strategy 2025” covering eight key sectors including clean energy, defence and digital and technology projects, it is clear that there is a lot more that will be coming out in this space.

In this post we highlight some of the key facts and figures that have been provided so far and flag up what to look out for in the weeks and months to come.

• The UK Infrastructure Strategy at a glance:
  • The Infrastructure Strategy represents a single, joined-up plan covering economic, social, and housing infrastructure, to be overseen by the National Infrastructure and Service Transformation Authority (NISTA).
  • It is backed by at least £725bn of public money over the next ten years – although there is a large amount of business-as-usual spending included in this headline number so we will need to wait for the detail in order to determine how much of this is “new spend”.
  • NISTA intends to launch an online Infrastructure Pipeline in July 2025, which will set out detail of infrastructure and construction projects and programmes being progressed and planned over a ten year period.
  • The Strategy includes funding certainty for roads, rail, digital connectivity, clean energy, housing, schools, hospitals, justice facilities, and flood defences. Multi-year budgets will be set up to ten years ahead for key programmes, with regular updates every two years.
  • Further detail on projects such as the Northern Powerhouse Rail, and the potential funding structures for the Lower Thames Crossing (RAB) and the redevelopment of Euston Station (PPP) are to be provided at a later date.
  • The Government is signalling a change in mindset towards building infrastructure asset surpluses to avoid constraints on economic growth caused by insufficient infrastructure capacity.
  • A key part of the Strategy is to make the UK a clean energy superpower, spearheaded by the publicly owned Great British Energy company, which will develop and own clean power projects and invest over £8bn in the next spending period.
  • Targets set in this area include reaching up 43-50 GW of offshore wind, 27-29 GW of onshore wind and 45-47 GW of solar projects by 2030, the development of the first regional hydrogen transport and storage network (backed by over £500m from the Government) and supporting major carbon capture and storage (CCUS) clusters. However, although the headlines are attention grabbing, the additional expenditure for these projects has not yet been announced.
  • The Government has stated its intention to encourage private capital investment in order to achieve its goals, and there is acknowledgment that the private sector will need to provide the “vast majority” of the capital needed – it is expected that the private sector will need to contribute (i) £200bn to achieve energy goals by 2030 (comprising £30bn per year for generation and £10bn per year for transmission networks), and then £700bn by 2025; (ii) £50bn over the next decade to deploy gigabit capable networks and 5G access across the country; and (iii) £104bn total expenditure from water companies during the next five years (which includes £44bn of new infrastructure and resources).  Achieving this investment will be supported by the British Infrastructure Taskforce, which was convened in 2024.
  • Alongside ongoing sector-specific reviews of economically regulated sectors, the Government will continue its overarching regulatory action plan to support growth and it will publish an updated approach to economic regulation later this year.
  • The Competition and Markets Authority has also launched a market study into the supply of rail and road infrastructure by the civil engineering sector. The study is scheduled to run for 10 months and will focus on improving delivery of complex infrastructure projects in the UK. 
  • A key question remains as to whether the Government’s ambition for the Strategy aligns with the ability of the UK construction industry to deliver on the projects it contains.  The Strategy admits that, in a number of instances, supply chains are already stretched with on-site labour productivity having flatlined, and that there is a large maintenance backlog.  While the Strategy hopes to offer a longer pipeline to combat this, practical restraints will remain, including a skilled labour shortage in the UK.

We will keep you up to date as the Infrastructure pipeline comes on line (hopefully next month) and as further details are published.

If you have any questions about anything outlined above please get in touch.