Blog | UK’s Autumn Budget acknowledges the need for private investment in infrastructure

With UK Government finances stretched to record levels as a result of the pandemic, private capital will be vital to achieving the huge levels of investment required to meet long-term strategic ambitions, such as Net Zero and the Levelling-Up agenda. On the eve of COP26, GIIA Policy & Research Executive Estela Bibiloni Diaz analyses how these priorities have been reflected in the Autumn budget …

The budget and spending review announced on 27tOctober has targeted some key infrastructure areas. The Government has committed to investing £21bn on roads, £35bn on railways, and £6.9bn on transport infrastructure in cities outside London as part of the Levelling Up agenda. An additional £1.4bn will go into the establishment of the Global Britain Investment Fund, which will support the development of emerging technology, particularly in the electric vehicle sector, and thus crowd in private investment. An additional £1.7bn will go towards a new UK nuclear plant (widely expected to be Sizewell C).

Additionally, the UK Infrastructure Bank, with its role as a catalyzer of private investment, is off to a great start, having made the first commitment to the development of offshore wind infrastructure in the Tees Valley recently.

However, during the Budget announcement, Chancellor Rishi Sunak also acknowledged that ‘government action won’t be enough to create a stronger economy’ on its own.

As COP26 approaches, this statement builds on the recently released Net-Zero Strategy, which estimates that £90bn in additional private investment will be needed by 2030 if we are to achieve climate change targets. GIIA members are strongly committed to the achievement of the 2050 Net-Zero target and, over the last five years, have invested more than £25bn to new green infrastructure projects to meet the energy transition, on top of £63bn of investments already made.

In all, the Autumn Budget brings us one step closer to our goals in the allocation of public funding, and gives investors a better perspective on the plans of the Government.

What is now needed is a clear statement of intent to investors that the model of economic regulation in the UK will move away from a short-term focus on bill reduction and towards prioritising the investment that is required to meet existing and future challenges, while achieving a fair balance between cost and return.

Investors, therefore, look forward to the publication of the White Paper on Levelling-Up, the Regulation Policy Paper, which will set up the UK’s economic regulation environment for coming years, and the response of the Government to the Better Regulation Framework review.

These announcements, alongside the already published Regulated Asset Base (RAB) model for nuclear, will set out the first steps towards achieving the much-needed clarity that will help unlock the vast sums of long-term patient capital available from infrastructure investors.

GIIA looks forward to continuing working with the UK Government in achieving that regulatory stability and bringing into the conversation the voice of private infrastructure investors, who are keen to play their part in the transition to net zero by 2050.

2021 Global Infrastructure Index – Survey results

A new global study carried out in 28 countries by Ipsos MORI, in collaboration with the Global Infrastructure Investor Association, finds that the public places greater priority on addressing impacts on the environment over the economy when making decisions about how to improve infrastructure in their country.

Click here to view the 2021 Global Infrastructure Index results

In the lead-up to COP26, an average of 51% of citizens across the 28 countries felt that it is right to prioritise the impact on the environment, nearly double the 26% who put greater weight on economic impacts.

Furthermore, the environment was also ranked as the most important factor among seven criteria when planning for the future; an average of 26% of people ranked this first, slightly ahead of the quality of infrastructure, chosen by 23%. Ownership and disruption were the least likely to be chosen as the top priority, selected by just 9% and 7% respectively, with ownership most commonly chosen as the lowest ranked factor (ranked as seventh out of seven by 24%).

Lawrence Slade, CEO Global Infrastructure Investor Association, said:

“As world leaders come together in Glasgow to consider next steps in the battle to address climate change, this survey should embolden decision makers to put the environment at the heart of their infrastructure investment plans. Global citizens are far from satisfied with their infrastructure today and want to see improvements, with many placing climate-related infrastructure such as water supply, renewable energy and flood defences at the top of their list.”

The Global Infrastructure Index survey, which has been running annually since 2016, shows wide variations in satisfaction with infrastructure. For example:

  • 77% are satisfied with infrastructure in China while only 18% are positive in Italy, compared with the global country average of 39%.
  • Across the G8 nations 37% are satisfied, higher than the 35% in Great Britain and 27% in the U.S.
  • In Europe, infrastructure in the Netherlands (74%), France (53%) and Germany (51%) is rated much more positively than in Spain (25%), Hungary (20%) and Italy (18%) at the other end of the scale.

Globally in 2021, people in South Africa (79%) and Brazil (75%) are most likely to agree that their country is “not doing enough to meet our infrastructure needs” but this is a majority view in all but five of the 28 countries. Agreement is weakest in South Korea (28%) and Japan (29%). Great Britain (64%) and the U.S. (61%) rank higher than the G8 average of 55%.

On average, three-quarters, 75%, across the 28 countries agreed that investing in infrastructure will create new jobs and boost the economy. South Africa leads – 90% agree – while the lowest level of agreement was in Japan with 51%.

Water supply and sewerage were identified as priorities for investment with 42% selecting it from a list of 13 possibilities, followed by solar energy infrastructure (39%) and flood defences (36%). Airports were seen as a priority for investment by much smaller proportions of people with just 11% selecting this. The same proportion chose nuclear infrastructure to generate energy (it was excluded as an option in the survey in nine countries).

In Great Britain, four of the top five priorities are climate-related; flood defences (selected by 44%), solar energy (38%), wind energy (38%), and EV charging (37%) head the list alongside rail infrastructure (37%).  In the U.S., the top five priorities are water supply and sewerage (48%), the local road network (43%), motorway/major road network (42%), solar (37%) and wind energy (31%).

Globally, more people continue to prioritize improvements to social infrastructure (42%) such as schools, hospital buildings and housing in preference to economic infrastructure (35%) such as road, rail and air networks, utilities such as energy and water, and broadband and other communications. However, the gap has narrowed since last year – when the pandemic had increased attention to hospitals and schools – from 16 percentage points then (48% versus 32%), to 7 points this year.

There continues to be a preference for maintaining and repairing existing infrastructure (chosen by 55%) as a priority rather than spending on new infrastructure projects (20%), an identical pattern to that found in 2019.

In both the U.S. and Britain, 61% support the role of the private sector in investing in infrastructure with only 6% against this in the U.S. and 9% in Britain; they welcome the prospect of private investment if it means their country gets the infrastructure they need.

Slade continued: “Our survey shows that people are much less concerned about whether infrastructure improvements come from private or public sources and are much more focused on the quality and environmental considerations.  At a time when many countries are looking to boost their economies and recover from the effects of the pandemic, governments should be focused on how to unlock private sector expertise to help deliver their future infrastructure needs.”

Spotlight on the U.S.

  • In the States, 27% are satisfied with their country’s infrastructure, compared to 37% who are dissatisfied. The Latin America region is the only one among six where dissatisfaction is higher.
  • 70% agree that investing in infrastructure will create new jobs and boost the economy, yet 61% believe that ‘not enough is being done’ to meet their country’s infrastructure needs.
  • Americans are overwhelmingly supportive (61%) of private investment in infrastructure if it means the country gets what’s needed with only 6% disagreeing.
  • Unlike most other countries, Americans would give higher priority to economic infrastructure (47%) over social infrastructure (27%). This compares to the global country average of 35% and 42% respectively.
  • In terms of specific infrastructure sectors, Americans would prioritize investment in water supply and sewerage (48%), the local road network (43%), major road networks (42%), solar (37%) and wind energy (31%).

Spotlight on Great Britain

  • In Britain, 35% are satisfied with their country’s infrastructure, compared to 26% who are dissatisfied.
  • 79% agree that investing in infrastructure will create new jobs and boost the economy, yet 64% believe that ‘not enough is being done’ to meet infrastructure needs.
  • Britons are overwhelmingly supportive (61%) of private investment in infrastructure if it means the country gets what’s needed with only 9% disagreeing.
  • In terms of specific infrastructure sectors, four of the top five priorities for investment are climate-related with flood defences (44%), solar energy (38%), wind energy (38%), and EV charging (37%) heading the list along with rail infrastructure (37%).
  • When making decisions about how to invest in infrastructure, 51% of Britons would give higher priority to considering the environmental impacts compared to 21% who would prioritize economic impacts.

Ensuring sufficient investment to meet our Net-Zero target

Writing for Utility Week GIIA CEO Lawrence Slade says there is no time to waste on securing net zero investment … 

Infrastructure is of course key to modern life, and even while many of us are now no longer commuting, digital networks have replaced transport infrastructure as being essential to our everyday lives.  As we progress further into the 2020s and as the pressure to decarbonise our economy to meet our 2050 net-zero carbon goals becomes stronger, so will the pressure grow to ensure that our infrastructure is fit-for-purpose not just for today but for decades to come.  Worryingly in the most recent Global Infrastructure Investor Association (GIIA) and Ipsos MORI report 65% of people think that Britain is not doing enough to meet infrastructure needs – a figure that, for instance, indicates that the UK lags behind other G8 countries.

Achieving Net-Zero will require substantial investment across both greenfield and brownfield infrastructure.  A recent report produced by the GIIA in partnership with PwC indicated that to finance the transition to net-zero, the UK would need to attract investment in the 2020s alone of at least £400bn.

While of course, it is also fair to say that the government will also fund varying amounts of the investment required- COVID-19 has added immense fiscal pressure to already strained public budgets, thereby increasing the need to attract private finance.  However, to complicate matters, the UK is not the only nation or trading bloc to have committed to net- zero, and the huge investment that this entails.   Given the scale of investment needed around the globe, the UK must ensure that it has the appropriate policy and regulatory frameworks in place that will ensure it can compete to attract capital from long-term investors.   This necessity should not be taken for granted as over the past few years foreign direct investment levels overall into the UK have been falling.  The House of Commons Library shows that by 2019 FDI had fallen for the third consecutive year since 2016, having peaked at £192bn in 2016 to £35.6bn in 2019.

So, what needs to be done?

Over the past few decades, the UK has seen hundreds of billions invested in its water and energy networks alone, a sum that is nearly double pre-privatisation levels.  This investment was attracted by the UK’s excellent regulatory frameworks. But over the last decade, the view of many is that these “gold standards” have been steadily undermined, to an extent that confidence has reached a low point at the very moment when the UK needs to increase FDI.

The long-awaited National Instructure Strategy laid out the welcome expectation that substantial levels of private capital will be required to meet the UK’s infrastructure investment needs; HM Treasury expects private finance to provide at least half the required investment – while acknowledging more needs to be done to mobilise this.  For instance there is also an acceptance that the UK’s regulatory regime must be updated to reflect the different challenges of today, helping to ensure that private sector investment can be unlocked at the lowest possible cost.  Likewise, there must also be a clear understanding of the roles and responsibilities of regulators and governments, linked to a commitment that aligns the interests of consumers in both the short and the long term.

But regulatory reform is just part of what needs to happen if we are to see the required levels of private investment in the UK’s infrastructure across the length and breadth of the country helping to deliver against not just the net-zero agenda but importantly helping to meet the government’s levelling up ambition.

The recent publication of the National Infrastructure Strategy, the Energy White Paper, and other government policy papers has provided an encouraging glimpse of the government’s direction of travel.  However, as the National Infrastructure Commission recently called for in its 2021 Monitor Report, we desperately need a clear framework that sets out the delivery plan that will achieve these policy goals; a plan that will provide investors sight of a strong pipeline of projects laid out over the next few decades.

The government needs to work with industry to resolve issues tied to more nascent technologies such as CCUS and hydrogen where revenue models are underdeveloped.  There needs to be an honest conversation about the role and expectations for these technologies; their ambitions for instance for hydrogen across industrial applications and domestic applications and the gas versus electric heat debate for example. Only when investors and industry can see these answers and can judge how the government is seeing the risk and reward balance can sensible decisions be made.

Over the years there has been much debate about the benefits of private investment in the UKs infrastructure.  We strongly recommend that all parties work together to build a strong transparent evidence base that can allow stakeholders to make accurate performance evaluations of the value of private investment in, and operation of, our infrastructure.  This will assist and improve future financing decisions; help rebuild trust and aid discussions around the suitability of different financing models across differing sectors.

Also, it is of the upmost importance that the Government should carefully consider the application of powers granted by the National Security and Investment Bill.  The scope of the bill is very wide, creating the likelihood that a large volume of notifications should be expected when the powers become operational. Given this, Government must ensure that the unit set up to manage this is fit for purpose from day one, ensuring any delays in deal approval are kept to a minimum and that there is as much transparency as possible around decisions.  Moves to encourage early informal advice are to be welcomed, this should be combined with a determination from government to use its powers sparingly, to help continue the view of the UK being a positive destination for foreign investment.

As we approach COP26 the government, regulators, and investors must work together across this agenda to stand a chance of delivering the scale of ambition for UK infrastructure.  It is often said that there is no shortage of money, and indeed the GIIA estimates that the leading private investors in infrastructure have at least US$200bn of “dry powder” available for deployment, with new funds being raised all the time.

But there is a shortage of time.

When Net Zero 2050 was announced, there were 122 quarters before 2050.  Since the legislation came into being on 27th June 2019, we have burnt through 6 of these and are nearly through the 7th.  As a country we have the technology, skills, and businesses; let’s not waste any more time and ensure we get the right frameworks in place to guarantee we also have the required levels of investment from private as well as public sources. 

NEW REPORT | Global Risks for Infrastructure – The Climate Challenge

GIIA, in partnership with Marsh & McLennan, is pleased to release the second in a three part analysis of global risks for infrastructure investors. Looking at the Climate Challenge, this report discusses the specific risks to infrastructure investors under each of the key risk categories outlined by the Task Force on Climate-related Financial Disclosures, as well as crucial levers for achieving climate resilience at both the portfolio and asset level for the infrastructure sector.

Click the image below to read Global Risks for Infrastructure – The Climate Challenge

Physical risks related to climate change are becoming a crucial risk category for infrastructure owners and operators. Natural disasters are already a leading cause of infrastructure disruptions in high-income nations, and climate change is expected to exacerbate these disruptions. In addition, increased urbanisation is heightening concentration of infrastructure assets in high risk areas.

Applying the three mutually reinforcing levers discussed in this report can provide infrastructure investors with a launchpad for developing a dynamic and future-ready climate resilience strategy.


The first instalment of this series illustrated the risk landscape for infrastructure with the release of the 2020 Global Risks for Infrastructure Map while the upcoming final instalment will explore the impact of transformative and disruptive technological innovations on the infrastructure sector, with an expected release in Q4 2020.

GIIA Members’ Assets Exceeds $750bn

The 2020 edition of the GIIA / EY Global Asset Database reveals that GIIA members assets under management has exceeded US$780bn – comprising more than 1,500 assets across 55 countries.

This is an increase of more than £120bn since 2018/19.

The GIIA / EY Global Asset Database shows that GIIA members own, operate and invest in:

  • More than 100 airports serving more than 1 billion passengers annually
  • Utility companies serving 86.3 million customers
  • 321 ports moving more than 500m tonnes of cargo
  • 56,100MW of wind power, 18,600MW of solar power and 12,400MW of hydro power and biomass


Speaking on the release of the GIIA / EY Global Asset Database CEO Lawrence Slade said the results showed the value of private investment in infrastructure.

“At a time when Government balance sheets are under enormous pressure, the private sector has the available capital, experience and innovative ideas to deliver the environmental and socially responsible infrastructure needed for future generations.”

GIIA’s global membership has also continued to increase in 2019/20 with the addition of members from across traditional markets as well as Japan and India.


GIIA is grateful to EY for their support in putting together this information.


New Blog: Fight for net zero goes on, despite crisis

Writing for Utility Week CEO Lawrence Slade says even in these difficult times, utilities must continue to focus on the need to reduce emissions and the shift to a zero-carbon economy.

Our lives have changed completely in the space of just a few short weeks. Perhaps, in terms of how we work and manage our lives, things will never quite go back to normal, with more flexible working across thousands of roles and companies becoming the norm.

Uniquely, everyone in the country is affected. This will bring many challenges, not least to the National Health Service, whose staff deserve our heartfelt thanks for their amazing efforts, but also to those working to ensure the essential infrastructure that we all rely on, including electricity, gas, water, broadband and tele­coms networks, remains operational over this difficult period. The robustness of our utilities is something that, as a sector, we should be proud of.

But while it is understandably difficult to look beyond the next few weeks, we must. The underlying issues we faced before the Covid-19 crisis remain. For many reasons it is a blessing that we are emerging from winter, with the warmer weather able to bring respite on a number of fronts.

While this is welcome, many of our properties are still poorly insulated and thousands of families are living without modern levels of comfort. Furthermore, reduced incomes and sudden bill shocks as a result of economic volatility will not help, making it certain that many families will need further short-term help to manage debt in the coming months, as well as long-term solutions such as the provision of energy efficiency. Linked to this, of course, is the need to reduce our emissions and the longer-term move to a zero-carbon economy. The urgency to act is still there.

To meet the challenge of climate change, we know that many billions of pounds need to be invested in our infrastructure over the coming decades. Unfortunately, time is not on our side.

The chancellor’s moves to support the economy will provide vital respite for many businesses and families and will need to continue for some time. But, as has happened at other times of national emergency, it is important that we also look ahead to the future. We need to look at how we will get our economy moving again and how we invest in our communities to ensure value is created for all stakeholders.

Before the crisis hit, 2020 was, as the National Infrastructure Commission said, shaping up to be a year of decisive action. Reports suggested that the budget would give long-awaited clarity on infrastructure investment, building on the announcements in November that laid out how much money was to be invested in our infrastructure and how that could be split between the private and public sectors.

This was to be seen as a new start, with investment expected to be made in infrastructure projects across the UK – part of the process of “levelling up” our society away from an historical focus on investment in the South.

Moves to allow onshore wind and solar projects to bid in the contracts for difference auctions were welcome, likewise the move to speed up the roll-out of fibre-optic cabling for better broadband connectivity, but we need to keep the momentum going.

Addressing climate change, making the investment in new – and upgrading existing – infrastructure and delivering a clean, carbon-free economy is something that future generations will thank us for. When we surface from the current crisis, we have the opportunity to reset society’s relationship with the built environment and pull the country together.

Combining government funding with that available from the private sector will allow us to achieve much more, much faster. Utility projects do not happen overnight; rather they take years of planning and building before delivery. As a country, whether it is across our energy, water or telecoms networks, we need to plan and to act to ensure that the right long-term strategy is in place.

A strategic dialogue between government, devolved administrations and the private sector will ensure that private capital is deployed where it is most needed to aid economic recovery. To be absolutely clear, the government’s immediate priority must be to respond to the health crisis by ensuring our hospitals and hard-working staff are provided the necessary equipment needed to save lives.

But at the same time, working together we can begin the important job of delivering the infrastructure needed to propel the country’s economy.

Private investors stand ready with capital to deploy to support these public sector-led initiatives, as well as offering unrivalled expertise in project management and delivery.