Infrastructure in the UK needs to be not only maintained, but also significantly upgraded if we are to meet our net zero obligations and Levelling Up ambitions. This will require significant levels of investment from you, businesses.
Whilst the government has committed in its National Infrastructure Strategy to spending around 1.2% of GDP on infrastructure, this level of spending will not alone deliver the ‘infrastructure revolution’ the UK requires. You have suggested that the availability of private capital for infrastructure generally remains high, but there is difficulty in attracting attention of lenders.
This difficulty consists of:
- Current regulatory frameworks
- Political uncertainty following the end of PFI/PF2
- Lack of clarity around the National Infrastructure Pipeline
- Low clarity about funding models.
Despite these challenges, you have expressed appetite to explore how more private finance could be applied to a range of infrastructure projects. This paper brings together this thinking by outlining current examples of best practice in infrastructure financing and how these could be applied more widely. This includes an overview of:
- Regulated Asset Base models
- Land Value Capture
- Joint Ventures
- Contracts for Difference
- Concessions
- Alternative funding models.
The CBI intends to increase dialogue between government departments and business around the role that private finance plays in delivering infrastructure projects.
With this new insight document we aim to demonstrate, particularly to HM Treasury, the potential there is for deploying some of the existing private finance models and schemes for securing long-lasting infrastructure which will bring not only financial, but also economic and social benefits.
Read the CBI Insight document.
Speak to Kate if you have any questions.
