£500bn investment in infrastructure pipeline

Richard Furlong - City Surveys Group

Home » £500bn investment in infrastructure pipeline

Published: 12th December 2016

This Article was Written by: Richard Furlong - City Surveys Group


This week the government published the National Infrastructure and Construction Pipeline, revealing more than £500bn in planned public and private sector investment.

Government ministers have welcomed the news, calling it the ‘largest and most comprehensive infrastructure plan ever’ and there are high hopes that it will help rescue the UK’s ailing productivity.

Once implemented, it could result in more work for the construction industry than ever before and, to quote David Gauke, Chief Secretary to the Treasury, it: “is set to make a real difference to people’s lives from quicker and easier journeys, to better broadband access, and building more homes for people who need them in high demand areas.”

Over 20 schemes have been added to the pipeline since Spring 2016, with a net increase in value of more than £37bn. This includes four years additional funding of £10.5bn for infrastructure and housing investment, as announced in the Chancellor’s Autumn Statement.

Schemes in development include the Oxford to Cambridge Expressway, considered ‘a significant growth corridor’; the Thames Tideway Tunnel; and a much needed upgrade to the A14 in the south of England.

Governmental department, the Infrastructure and Projects Authority (IPA), is charged with delivering these national projects.

Chief Executive of the IPA, Tony Meggs, said: “Creating the IPA has enabled us to produce a more comprehensive pipeline. Having the visibility and certainty of a pipeline of construction and infrastructure investment allows industry to invest strategically for the market, not just tactically for the project.”

Mr Gauke added: “[the investment] is clear proof that we are absolutely committed to ensure our infrastructure is fit for the future.”

With ambitious plans to close the UK’s ‘productivity gap’ new pipeline funding will be delivered jointly by investment from the public and private sectors.

Government funding will account for more than 40% of the total investment and will build upon one of the major themes of the Autumn Statement, where a £23bn National Productivity Investment Fund was announced.

Published alongside the new pipeline is a Funding and Finance Supplement, the purpose of which is to attract additional private sector investment to the numerous infrastructure projects.

According to the IPA, the latest version of the pipeline is to be the largest and most comprehensive infrastructure plan ever published.

A breakdown includes:

  • £2.6bn reserved for transport networks; £1.3bn for roads and local transport networks and £390m for low emission and driverless vehicles;
  • £5.3bn investment into housing, including £2.3bn courtesy of the Northern Powerhouse Investment Fund (NPIF);
  • An additional £1.4bn investment from the NPIF will go towards delivering 40,000 new affordable homes in the UK;
  • The government will invest £1bn in developing the UK’s ‘digital infrastructure’ by 2020-21.

Nearly three quarters of the total value of the pipeline is anchored to just three sectors, and it is no coincidence they are set to receive the highest level of investment too.

The transport sector is set to benefit from £92bn of investment (20% of which is going on roads and more than 15% on high speed rail); the energy sector will receive £79bn (50% of which will go into electricity generation); and utilities will receive £59bn.

Alasdair Reisner, Civil Engineering Contractors Association (CECA) Chief Executive, said: “If the UK infrastructure sector is to plan for the investment in skills and innovation that will be required to deliver world-class infrastructure in the coming years, it is vital that companies are able to strategically allocate funding on a basis of projected need.

“The pipeline is a crucial tool that enables companies to plan ahead and deliver optimal outcomes for clients, taxpayers, and communities.”

The full document can be read on the IPA website.

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