The government’s 10 Year Infrastructure Strategy has underlined the requirement for private financing to meet the UK’s infrastructure goals and revealed models under consideration for deliver of the Lower Thames Crossing (LTC) and the High Speed 2 (HS2) Euston station.
The much-trailed 10 Year Infrastructure Strategy was published today, 19 June, providing details on the promised £725bn investment in UK infrastructure to come over the next decade and how it will attract private monies to enable this.
During a press briefing, chief secretary to the Treasury Darren Jones emphasised that the government is not returning to Private Finance Initiative (PFI) contracts, which were discontinued by the former government in 2018, nor will it turn to the Mutual Investment Model (Mim) used in Wales.
“We do think there’s the potential on some on some very specific use cases where it meets value for money criteria from the Treasury’s perspective, where private capital could enable us to deliver more than we can just based on public sector grant,” Jones said.
Models for LTC and Euston
Building on the £590M committed to LTC, revealed earlier this week, the Strategy says: “Further work, including on a Regulated Asset Base model, is being undertaken in parallel to design and agree a funding model which delivers value for money for the taxpayer and users.”
The regulated asset base (RAB) model was successfully used to deliver the Thames Tideway Tunnel and is going to be used on Sizewell C nuclear power station. “Under this model, regulated entities are allowed to recover their investment costs, including a reasonable return, through customer charges based on the RAB value,” the Strategy outlines.
Meanwhile, for the long-delayed HS2 Euston station, the Strategy confirms the continued search for a public private partnership (PPP) to bring it forward.
“The PPP model is a long-term contract between a private party and the public sector where the private sector designs, builds, finances and operates a public asset and related services,” the Strategy states. “The private sector finances the construction of the asset and is recompensed for this, and ongoing maintenance, via annual payments either directly from taxpayers or through consumer charges (for example, tolls or fares).”
It acknowledges the issues with PPP contracts in the UK – citing PFI and PF2 – but says the the criticisms “focused on the complexity and flexibility of the contracts, along with value for money concerns”.
It goes on to say: “A well-designed PPP model can bring in private sector discipline to reduce deliverability risk as the private sector is incentivised to deliver to budget and time. In some cases, PPPs can bring these and other benefits to infrastructure projects, but this needs to be balanced with the management of risks and costs. This can be done by the careful, targeted use of PPPs for the projects and sectors where risks can be well managed so that private financing achieves value for money.
“The government will consider the use of PPPs in projects and sectors where there is a revenue stream, appropriate risk-transfer can be achieved, and value for money for taxpayers can be secured.”
Specifically on HS2 Euston, it states: “The additional investment required to build the new HS2 station is an exciting opportunity for private investors. The government will therefore be exploring both the use of private capital to design, build, finance and maintain the HS2 station, and the most effective way to capture the value created by development and recycle it to repay public investment, including a Tax Increment Financing-style mechanism.”
It reiterates plans to establish a Euston Delivery Company to oversee the private finance and proposals for the station, which will work with the London Borough of Camden and the Greater London Authority to “grow a commercial and life sciences core around the station; and deliver affordable housing and regeneration in the surrounding area”. This will “be furthered by” Lendlease’s plan to deliver 24ha of commercial development above and around the new station.
How will private money be attracted?
Publishing the 10-Year Infrastructure Strategy is seen as a crucial step towards providing the certainty that will attract private investors.
Jones was keen to stress that the Strategy is intended to provide “credible certainty for investors and the economy”, which means that it “is not going to get rewritten every six months”.
Central to the Strategy’s play for private money are three pillars of action: enhancing the supply of private capital by collaborating with pension funds and other capital providers; matching these funds to viable investment opportunities through public financial institutions and tailored regulation; and ensuring a steady flow of projects that stimulate demand for private capital by evolving infrastructure finance models and delivering a clear pipeline of opportunities.
Additionally, it states that the chancellor’s establishment of the British Infrastructure Taskforce reflects the government’s commitment to fostering closer cooperation with the private sector. This taskforce will play a pivotal role in unlocking investment and catalysing confidence within the financial community.
It also highlights the Mansion House Accord, signed in May by 17 of the UK’s largest defined contribution pension schemes. This voluntary commitment pledges that 10% of their main default funds will be invested in private markets, with half targeting UK-specific opportunities. This could potentially free up over £25bn to be channelled into infrastructure and business ventures that boost UK productivity.
Insurers also remain a vital component in this financial ecosystem. Recent reforms to Solvency II, the prudential regulatory framework for insurers, have improved incentives for them to invest in productive infrastructure assets. Further regulatory innovations, such as the proposed Matching Adjustment Investment Accelerator, are expected to accelerate life insurers’ investments, with collaboration ongoing between the Prudential Regulation Authority (PRA) and the National Wealth Fund to streamline this process.
Regulatory reform is another cornerstone of the government’s approach to fostering a competitive and growth-friendly investment climate. The Regulation Action Plan outlines measures to create a more proportionate regulatory landscape, with detailed steps to be revealed in forthcoming strategies on financial services growth and competitiveness. The aim is to balance investor returns that are internationally competitive with the financial realities faced by UK households, ensuring consumer protection while building investor trust.
The government is also exploring ways to improve the capital efficiency of infrastructure investments, potentially unlocking capital tied up in mature assets to fund new projects. This approach would help ensure the right investors hold assets at different lifecycle stages, freeing up risk-tolerant funds for innovative infrastructure development.
To translate the increased availability of capital into tangible projects, the Strategy emphasises a transparent pipeline of investible opportunities. The expanded Office for Investment (OfI) will spearhead this effort, backed by new funding from the 2025 Spending Review and supported by a Strategic Investment Opportunities unit. This unit will collaborate closely with local authorities, departments, and public organisations to identify and nurture projects ripe for private investment.
Noteworthy examples include OfI’s previous success in accelerating investment opportunities in Liverpool City Region and the North East, which the new unit aims to replicate and scale. By aligning projects with investor demand and drawing on private sector expertise, the government hopes to ensure these initiatives reach fruition with the right financing structures.
Historically, a large share of private investment has concentrated in economically regulated sectors, contributing £30 to £40bn annually over the past decade, according to the government. While this regulatory framework has delivered consumer benefits, it has also faced challenges, including some unmet consumer outcomes and investment lagging behind demand. The government acknowledges the need for a step-change in infrastructure investment at an unprecedented scale to meet 21st-century challenges, and this will require a more transparent, predictable, and balanced regulatory regime.
In March 2025, the government committed to a comprehensive overhaul of the regulatory system to better protect consumers and support growth, as a first step in the broader reform programme. This reform will require concerted efforts from both regulators and the government to navigate complex trade-offs and streamline decision-making processes.
Ultimately, the 10 Year Infrastructure Strategy marks a decisive shift towards harnessing the power of private capital alongside public funding, supported by innovative regulatory reforms and improved coordination between government and finance. If successful, the strategy promises to unlock substantial investment, drive economic growth, safeguard the environment, and enhance the UK’s infrastructure resilience for decades to come.
Sector commentary: ‘life changing for the British people’
Institution of Civil Engineers director of policy and external affairs Sam Gould said: “The 10 Year Infrastructure Strategy is a significant moment for the UK’s infrastructure sector. It provides long term clarity and sets out the central role the National Infrastructure and Service Transformation Authority will play in improving infrastructure delivery across the country.
“There are lots of positives to acknowledge, including a strong focus on maintenance and spatial planning that will consider environmental, infrastructure, industrial growth and housing needs in the round. It’s also good to see additional clarity on private finance.
“These points echo many of the recommendations the ICE has been making for the past few years.
“The commitments to publish a credible pipeline and review the strategy, and report on progress every two years, indicates the appetite for delivery.
“However, to sustain progress, the sector will need more information on private finance models, and more detail is needed on how the UK’s infrastructure will meet the demands of our changing climate.
“In between now and 2027, NISTA must focus on implementing this strategy and providing the detail needed on these points.
“There is a big job to do, but the strategy lays good foundations. The ICE looks forward to working with the government to build on them and deliver the UK’s social, economic, and environmental goals.”
WSP UK and Ireland director of government relations and corporate responsibility Rachel Skinner said: “The ambition and direction of travel set out in the UK’s 10-Year Infrastructure Strategy is exactly what we need, a move towards clear, contextual planning that reflects the realities of place and sector.
“Finding ways to embed new private sector investment alongside stable government funding commitments will be key to the decade ahead, as will a far stronger emphasis on the creation of more resilient, reliable and low-carbon infrastructure systems. Unless our built and natural systems are ready to cope with the reality of increasing weather extremes, the UK’s pathway to sustainable, inclusive growth is fundamentally at risk. Every disruption, from transport to digital to water, affects real people, communities and businesses. We are strongly supportive of a bold, joined-up approach that unites infrastructure, industrial strategy, sustainable outcomes and spatial planning.”
Association of Infrastructure Investors in Public Private Partnerships (AIIP) chair Lord Hutton said: “The commitment to develop new public private partnerships (PPPs) to build and rebuild our schools, hospitals and public infrastructure is welcome and long overdue.
“There is now an opportunity for an honest dialogue between government and investors on how to develop the best model for PPPs, which the NAO noted are more likely to deliver on time and on budget.
“We need to learn the lessons from the past, to reduce complexities and ensure value for money for taxpayers. That includes a process for dealing with the £5bn of assets that are due to be handed back this Parliament, ensuring that contracts are either extended, or the handback is smooth to protect services for the public.”
Chief executive of the Civil Engineering Contractors Association (CECA) Alasdair Reisner said: “CECA has called for long-term certainty in infrastructure planning for years. This strategy marks a pivotal moment in turning that aspiration into a reality.
“The Government’s ambitious commitments – from a renewed focus on maintaining local infrastructure and aging assets via a new £1bn ‘Structures Fund’, to vital new investment in nationally significant schemes like the Lower Thames Crossing – demonstrate that Government is serious about addressing long-standing infrastructure needs.
“It is only through investment in nationally significant schemes such as new nuclear energy, targeted road and rail upgrades, and pinpointing investment in maintenance where and when it is needed, that the UK economy can keep up with our competitors and deliver the quality of life that the British people deserve.
“We were supportive of the Government’s decision earlier this year to found the National Infrastructure and Service Transportation Authority (Nista), which will lead cross-government infrastructure strategy, streamline decisionmaking, and help drive private investment.
“Nista will be subject to formal reviews of the progress it has made every two years, and we look forward to working with our members, their clients, and the wider supply chain to ensure that it fulfils its potential in driving momentum and allowing CECA members to deliver world-class infrastructure to the benefit of businesses and communities across the country.
“Now that the Government has set out its vision for the next infrastructure decade, industry is primed and ready to get spades in the ground on schemes that will drive economic growth, create jobs in all parts of the country, and be genuinely life-changing for the British people.”
ACE Group chief executive, Kate Jennings said: “This strategy marks a step change in how the country plans, funds and delivers the infrastructure critical to our future success. The industry now has an element of certainty and will soon have a pipeline of investable projects. The consultancy and engineering sector stands ready to deliver — drawing on both domestic talent and world-class global capability.
“ACE Group members, many of which lead complex infrastructure programmes from Toronto to Tokyo, are best placed to help realise the strategy’s goals. SMEs are often at the forefront of delivery which will require the agile expert engineering resources and innovation offered by British SMES.
“Our members have a track record in delivering large-scale, complex infrastructure through innovative approaches such as alliancing, outcome-based contracting, and digital-first project management.
“From pioneering digital twins to decarbonising infrastructure at scale, UK engineering consultancies are already exporting best-in-class thinking around the world. If we want the private sector to step up, we need to create the right conditions: certainty, continuity, and collaboration. This strategy is a strong start to achieving exactly that and strong private sector involvement will be mission critical.”
Mott MacDonald executive board director and regional managing director for UK and Europe Richard Risdon said: “The government has demonstrated that it understands improving the UK’s infrastructure is vital to increasing productivity and driving positive economic, social and environmental outcomes. Its belief that funding the management of existing assets is just as important as the investment in new ones, is most welcome.
“The confirmed plans for significant investment across a wide range of sectors will help deliver a place-based approach.
“It is critical now that the government ensures the plan is built to last and transcends politics, so future governments see through the whole 10 years. It’s not just the strategy that matters though. We need government to adopt a holistic approach to encouraging people to join our sector and to develop the skills needed to design and deliver all this new infrastructure.
“I have always been clear that the private sector will need to play an increasingly involved role in major projects. However, the industry must demonstrate confidence in its ability to deliver on the plan in order to attract the investment needed for the strategy to be successful too.
“Responsibility for the success lies with us as an industry as the strategy will ultimately be judged on whether it delivers the expected outcomes, alongside tangible progress in how we deliver.
“We look forward to the publication of the announced infrastructure pipeline and the increase transparency that this will give to the public about what will be built, when and where.”
Stantec regional business lead for infrastructure, UK&I Nancy MacDonald said: “Today’s announcement reinforces the government’s view that modern and sustainable infrastructure is essential for growth. This longer-term outlook should help provide the clarity that industry has been looking for, boost private sector confidence, and help the UK to both strengthen the foundations of our economy while also building upwards.
“Coupled with recent commitments across transport, energy and housing, the government has thrown down the gauntlet in the shape of £725bn over the next decade. With the pipeline of projects due to be published next month, it is the private sector’s responsibility to capitalise on this opportunity, drive further investment and get on with the task at hand.
“The strategy rightly recognises that boosting regional resilience is fundamental – and the importance of nature-based solutions as part of that. For example, much-needed investment in flood defences will help protect communities across the country from a changing climate. While big ticket flagship projects will grab headlines, a sustained focus on asset management and renewal of existing resources is critical too.
“In a time of geopolitical uncertainty and a rapidly changing economy, the industry also needs space to innovate and adapt. Like any strategy, the success of this one should be judged by what it creates rather than what it constrains.”
Bentley Systems VP of IPA thinktank Mark Coates said: “The 10-year infrastructure plan signals the Government is rightfully treating infrastructure as a critical driver of economic growth and social progress. With Nista now in place to bridge strategy and delivery, there’s a real opportunity to cut through red tape and coordinate new projects nationally. But we must remember a core principle: infrastructure should serve people and communities, not just KPIs.
“Unfortunately, we’ve seen too many previous initiatives fail under familiar pressures – siloed Government departments, short-term political goals driving decisions, and reactive investment. These do not deliver long-term value for the country.
”If we are serious about delivering genuine change and improvement through infrastructure, the UK must champion a systems-based approach from day one. This means mapping interdependencies, understanding long-term outcomes, and coordinating across sectors, not just projects. This isn’t just about building new things. It’s also about extracting more value from what we already have, by managing assets better and aligning decisions with actual performance and outcomes.
“To realise the UK’s infrastructure goals, attracting private investment is essential, and that will only happen by earning investor confidence. The key is not just creating shovel-ready projects but ensuring they are shovel-worthy from the outset. Investors want projects that are fully thought through from end-to-end. This means defining the outcomes upfront – from job creation to increased connectivity and productivity – and designing infrastructure that will deliver long-term value.
“We often see designs focused on opening day, rather than the decades of operations that follow. A systems approach changes this perspective. It considers long-term performance, digital integration, maintenance, stakeholder alignment, and environmental impact from the very beginning. By focusing on the entire lifecycle of a project, we can design infrastructure that not only meets immediate needs but also stands the test of time.”
Costain CEO Alex Vaughan said: “The launch of the UK’s 10-Year Infrastructure Strategy marks a crucial step towards ending the short-termism that has held our sector back. It offers the long-term certainty the industry needs to drive both the predictability and productivity of delivery, and to invest in the skills needed to build the infrastructure of tomorrow. What we would like to see now is a cabinet-level Minister for Infrastructure to champion delivery and keep the strategy on course. Infrastructure isn’t optional, it’s the foundation of creating a sustainable future, and a more prosperous, resilient and decarbonised UK.”
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