ICE submission to the PAC inquiry on the government’s use of private finance for infrastructure

The UK government wants to increase private investment in infrastructure to support economic growth

This inquiry by the Public Accounts Committee examined the costs, benefits, risks and opportunities of this approach.

The ICE’s response draws on insight from its briefing paper on paying for Britain’s infrastructure system.

It makes the following key points:

• The government needs to clarify its infrastructure investment plans. The 10-year national infrastructure strategy must enable the 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 to be strengthened 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 wants 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.