Stuart McMillan
By Stuart McMillan, infrastructure partner at UK law firm Burges Salmon
The UK infrastructure sector could be gearing itself up for a major shift as the private sector eyes a revived role as an active delivery and financing partner. Labour has long been open about its ambition to collaborate more heavily with the private sector, through public-private partnerships (PPPs), and this is a change that will be welcomed by many.
It has been clear for many years that there is a need for a massive step-shift in infrastructure investment in the UK. This can only be achieved by the public and private sectors working together, with Government ensuring that the UK is an attractive place for the private sector to invest in.
However, we need PPP models which the private sector can understand and easily invest into. Ther won’t be a “one size fits all” model such as PFIs, Private Finance Initiatives, but there could be a number of models the Government could look at and develop to suit different aspects of infrastructure investment. This might include things like RAB in sectors such as nuclear, models similar to the Welsh MIM on social infrastructure and roads and other more bespoke models such as the DPC model currently being rolled out in the water sector.
The Government, per its manifesto, aims to create a dynamic net zero economy. Plans to transform the UK into a 21st-century renewable energy superpower include building gigafactories for electric vehicles, ramping up EV charge points, creating new reservoirs, pushing sustainable aviation fuel and regenerating industrial and port areas to aid the net zero supply chain. In parallel, Labour also said it wants to take immediate action on housing and planning reforms to speed up housing and infrastructure development.
The Government’s commitment to funding local capacity to deliver on its green and housing infrastructure ambitions will be critically important to enable local governments to deliver against what is required of them. This makes a compelling argument for the wider use of PPPs.
In conjunction, a big move to watch is the potential merger of the Infrastructure & Projects Authority with the National Infrastructure Commission, provisionally named the National Infrastructure and Service Transformation Authority (Nista). The merger would streamline the planning and delivery of infrastructure projects by combining the expertise and functions of both organisations and could play a significant role in shaping the UK’s infrastructure strategy and investment, ensuring that major capital projects are delivered efficiently and align with national economic goals. However, many questions remain as to how Nista will operate. The key to its success will be for it to have the strength and operational independence to sponsor key projects and drive these forward, in partnership with the private sector.
As the Government seeks to enhance collaboration between public and private bodies, now is the perfect time for a conversation among all stakeholders in the sector.
