Housing and regeneration projects included in UK’s national infrastructure plans for first time

The total includes planned large-scale housing and regeneration projects for the first time, as well as investment in new local schools, hospitals and prisons. The government has committed to invest over £100bn in infrastructure by 2020/21, along with attracting “significant” private sector investment to deliver the projects set out in its new National Infrastructure Delivery Plan (NIDP).

The NIDP is the new name for the National Infrastructure Plan, and sets out £428bn worth of planned investment in over 600 major projects and programmes across the UK. Of this, over £297bn worth of projects are planned for delivery before the next election in 2021. The plans include £15bn worth of preannounced public sector spending on road and rail projects; over £100bn of planned private sector investment in energy projects; and plans to “facilitate” private sector investment in improved broadband and mobile networks.

Lord O’Neill, commercial secretary to the Treasury, said that the government was “stepping up with the private sector to invest in some of this country’s most ambitious projects to create a more secure future for the next generation”.

“From more modern transport links, to faster broadband, better infrastructure is at the heart of our plans to build a more productive economy and improve people’s everyday lives,” he said. “This government is determined, even at a time of global uncertainty, to invest in the long-term projects that will make our economy and our country fit for the future.”

The document envisages that the majority of energy, water and waste projects be funded by the private sector; transport, social infrastructure, science and research projects by the public sector and communications and flood defence projects through public/private funding models. In total, around 50% of projected spend will come from the public sector. The government intends to publish “a dedicated infrastructure finance and investments document” later this year.

The new Infrastructure and Projects Authority (IPA) is working with the Treasury to identify a “pipeline” of public sector projects that could be delivered in conjunction with the private sector through the new Private Finance 2 (PF2) funding model, which replaced the previous Private Finance Initiative (PFI) in 2013. The funding model, which was designed to speed up and make more transparent the use of private finance to deliver public infrastructure, has been successfully used to deliver part of the Priority Schools Building Programme and the £340 million Midland Metropolitan Hospital, according to the document.

“These projects have demonstrated that PF2 is an attractive contracting approach for both the public and private sectors,” the document said.

The NIDP also suggested that pension funds, insurers, the European Investment Bank (EIB) and ‘British Wealth Funds’, pooling the resources of local government pension schemes, would provide funding for infrastructure projects. The UK has been the second largest recipient of funds allocated by the European Fund for Strategic Investment to date, particularly in relation to smart meters and offshore wind, according to the report.

The IPA, which was formed from the merger of Infrastructure UK and the Major Projects Authority at the start of this year, will begin publishing annual updates of the government’s progress in delivering the plans set out in the NIDP from next year, according to the document.