ICE briefing paper: paying for Britain’s infrastructure system

This ICE Next Steps policy programme explored how the UK government can use a finite pot of public money – and other levers available to government – to attract private investment.

It also uses public polling by Opinium Research to explore the public’s attitude towards current infrastructure investment in the UK and the roles of the public and private sectors in meeting the UK’s needs.

The UK government urgently needs to build, fix and upgrade the country’s transport, water and energy systems, following decades of underinvestment.

But there’s strong global competition for capital and many investors see UK infrastructure as too high risk.

The briefing paper draws on insight from infrastructure professionals and other experts. It sets out the following key messages:

• The government needs to clarify its infrastructure investment plans. The 10-year national infrastructure strategy must enable development of a prioritised, stable pipeline of investible projects aligned with society’s needs.
• The government should focus on improving infrastructure delivery to build investor confidence. More early-stage work, closer collaboration with the supply chain and less political interference once projects are launched can reduce risk.
• Commercial capability needs strengthening across government. Key skills, like contract management, procurement and negotiation, are too thinly spread. Projects need better advice on which funding model to use.
• Public and private investment must be complementary. A more collaborative narrative around private investment could improve investors’ risk appetite. Public investment should target high-growth, innovative sectors to crowd-in private investors.
• The public want to hear more about infrastructure projects. The government should engage people more about how infrastructure investment meets their needs and the benefits of private sector involvement, as well as the costs.