BCIS reacts to 10-year infrastructure strategy

BCIS has praised the arrival of the government’s 10-year infrastructure strategy after its publication yesterday.

The strategy, which has been much-anticipated since the new government came into power, sets out how infrastructure projects will be delivered over the next decade.

Key points include:

• £725 billion of funding for infrastructure over 10 years
• An increase in maintenance spending to £10 billion by 2034-35 for justice, education and health estates
• £49 billion for the New Hospital Programme, wider repair and RAAC removal, (2030-31 to 2034-35)
• £20 billion for the School Rebuilding Programme, (2025-26 to 2034-35)
• Publication of the Infrastructure Pipeline in mid-July, to be updated every six months
• An interactive portal to record pipeline data and allow businesses to view opportunities up to 10 years ahead
• A commitment to exploring private finance models, including the regulated asset base, contracts for difference, capacity market auctions and the ‘cap & floor’ model

The strategy also presents a new governance and funding approach to ‘mega projects’ which refers to schemes deemed to have transformational impacts on the economy, society or national security.

This includes HS2 and other initiatives with whole life costs over £10 billion that take more than 10 years to deliver.

Reflecting on the approach, BCIS’s head of data services, Karl Horton, said: ‘Delays on big projects often lead to cost spikes. The introduction of incremental funding on the biggest schemes means the government, investors and contractors can control funding flow in line with uncertainty and risk.

‘It’s also a good omen that the government has acknowledged the value in tightening relationships between itself and the construction sector. More funding is always needed, but greater collaboration and better data usage are key principles for project success.’

Chief economist at BCIS, Dr David Crosthwaite, further commended the government on weighing up different private financing options.

He said: ‘It’s promising to see the strategy consider diverse private finance models as part of government aims to attract the sector’s investment. As highlighted in the strategy, investors have different risk appetites. 

‘The government’s willingness to use different models shows flexibility and will hopefully mobilise investors to act.’ 

Industry responses to the strategy have been broadly positive but questions remain over the continued wait on the Infrastructure Pipeline.  

Dr Crosthwaite added: ‘What’s sheet music without any notes? While the infrastructure strategy confirms key details on spending, operational planning reforms and funding approaches, construction businesses and investors are no clearer on the type and timeline of work ahead.  

‘As far as demand and investment is concerned, that’s what matters.’

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