A new report from TheCityUK and Freshfields calls for more decisive action to boost private sector investment into major infrastructure projects. It sets out how government can mobilise more private capital into major UK infrastructure projects, helping to fill the approximate £345bn funding gap highlighted in its 10 Year Infrastructure Strategy and drive growth.
The report, ‘Bridging the Infrastructure Funding Gap: Attracting private capital to deliver the UK infrastructure strategy and exporting innovative financing solutions’, makes clear that while the UK is already an attractive location for major project investment, the public funding shortfall needed through to 2040 requires the government to continue, and expand, its commitment to attracting private capital.
In an increasingly competitive global market, where countries are competing to draw investment for major infrastructure projects, ensuring a stable regulatory environment, faster decision-making and deploying proven revenue and risk-sharing models are all factors that would give greater confidence to investors in multi-decade projects in the UK.
The report also argues that the UK’s status as a global financial, legal and risk management hub, provides the UK with an opportunity to export its expertise globally, particularly to emerging and developed economies seeking advanced solutions to support their infrastructure development.
Miles Celic OBE, Chief Executive Officer, TheCityUK, said, “The UK has bold ambitions for infrastructure and a strong track record in financing major projects, but private capital can move anywhere, and red tape can strangle progress. To bring in private capital at scale, the UK needs stable, predictable rules; quicker and simpler routes through regulation and planning; and revenue and risk-sharing models that investors can rely on over the long term. This report sets out practical steps to make projects more investable which will crowd in long-term capital to support growth and jobs.
Jenny McIvor, partner at Freshfields, said, “Private capital is ready to play a much larger role in delivering the UK’s infrastructure ambitions, but investment at scale depends on clarity, consistency and confidence. By strengthening regulatory certainty, accelerating decision‑making and deploying proven commercial models, the UK can unlock long‑term capital for critical projects while reinforcing its position as a global centre of excellence for complex infrastructure financing.
To foster an environment in the UK that is more attractive for private capital investment in major domestic infrastructure projects, the report sets out the following areas for focus:
- Deliver stable and predictable regulatory frameworks for major projects, which minimise unnecessary complexity and are developed early.
- Continue targeted strategic government support to unlock nationally significant projects.
- Ensure predictable long-term revenue streams, hedged against inflation.
- Provide clarity on ministerial responsibility and accountability for infrastructure and major project delivery.
To position itself to export its infrastructure financing expertise globally to economies seeking advanced solutions, the report recommends that the UK should:
- Ensure that the government’s industrial, trade and infrastructure strategies are mutually reinforcing, since enabling UK-based firms to secure global infrastructure contracts not only generates export revenues, but it also drives investment in local skills, innovation, and production capabilities.
- Establish joint public-private working groups to tailor Team UK pitches for individual markets and major global projects, representing the full breadth of the financial and professional services industry’s strengths.
Further information about these recommendations can be found in the report.