UK faces £258bn infrastructure investment gap, report warns

The UK faces an additional £258bn of infrastructure investment over the next decade if it is to meet infrastructure requirements identified in the National Infrastructure Commission’s second National Infrastructure Assessment, according to a new report from the Public Private Partnership Commission (PPPC).

image: PPPC

The PPPC is a private-sector-led commission established to examine how greater collaboration between government and private investors could help deliver UK infrastructure. It is chaired by Sir John Armitt, who was the final chair of the National Infrastructure Commission before its functions were transferred to the National Infrastructure and Service Transformation Authority (NISTA) in April 2025. Armitt subsequently chaired NISTA’s Expert Advisory Council during 2025.

The commission's report, The State of Play, says infrastructure spending would need to be around two-thirds higher than currently planned over the next decade to meet the requirements identified in the former NIC's NIA2. If the existing balance between public and private investment were maintained, the additional requirement would amount to £258bn of public investment, or around £26bn a year.

The report argues that public finances alone are unlikely to be sufficient to meet the identified requirement and calls for greater use of private capital in infrastructure delivery. It also identifies planning delays, project delivery constraints and a lack of long-term certainty as barriers to increased investment.

Armitt said the UK needed to create conditions that would allow more private capital to be invested in infrastructure, arguing that the necessary capital exists but is not being channelled into projects at sufficient scale.

The report estimates that funding the additional requirement through taxation would require around £25bn a year in additional tax revenue by 2030, rising to £36bn by 2040. Financing the investment through additional borrowing would increase government debt-interest costs by an estimated £7bn a year by 2030, rising to £23bn by 2040.

The PPPC is supported by infrastructure businesses and investors, including Dalmore Capital, whose founding partner and CIO Alistair Ray contributed to the report. The commission's work is also supported by Bradshaw Advisory, which provides its secretariat and research support.

Ray said there was “no shortage of British money and no shortage of British need”, arguing that a consistent pipeline of investable projects could help channel more UK pension-fund capital into infrastructure.

The report comes alongside separate research by Oxford Economics examining the UK's longer-term infrastructure investment record. Commissioned by transport groups and infrastructure investors, the study found that UK investment has lagged most other G7 economies over the past 25 years.

Oxford Economics estimates that, had the UK invested at the average G7 rate since 2000, cumulative investment would have been around £1.9tn higher. It also found that the UK's productive capital stock is now the smallest in the G7 relative to GDP.

The research identifies factors including the cost of delivering and operating new infrastructure, business taxation and uncertainty over government policy as constraints on investment. It models the potential economic effects of increasing UK business investment towards the G7 average, estimating that real GDP could be 1.7% higher than its baseline by 2040.