INFRASTRUCTURE
Sector hopeful for sustained recovery in output if government unlocks investment
The infrastructure sector has had some headline-grabbing pipeline announcements in the last quarter and, with a spending review well underway, is likely to in the next quarter, too. The government’s consultation on planning reform for infrastructure projects is also expected to come forward in the next quarter. All in all, it may be considered a period of waiting for both spending plans and whether the government can truly shorten the lead-in time to delivery.
However, the last quarter has not been without significant pipeline impacts and it has been stop and go. The approach tunnels to Euston have reportedly been put on hold for up to two years. The government has also thrown its weight behind a third runway at Heathrow, but clearly that is not impacting construction pipelines for some time.
The Chancellor Rachel Reeves has somewhat driven expectations for the spending review by describing the fragility of the government’s coffers and the longer-term commitments to sustained and growing defence spending. In January she confirmed that the government was actively exploring PPP options for the Lower Thames Crossing. And so it would seem that the government may use PPP as a means to turn the spending tap on.
In other subsectors, reservoirs are gaining momentum in 2025, with the first reservoir in 30 years now under construction, and more appear to be coming forward, subject to planning. And a flurry of major utility contracts and highways projects are coming to the market later in the year. Yet, the overall infrastructure output is down for the last quarter of 2024, compared to the same quarter in 2023, with the only signs of optimism being that the rate of decline is slowing.
The infrastructure sector is therefore perhaps best described as having expectant optimism to replace the period of more recent gloom over output.
Matt Brooker
Partner Matthew.Brooker@uk.rlb.com
WEST MIDLANDS, UK
Coventry Very Light Rail
The UK’s growing cities need affordable integrated public transport solutions that get people out of their cars, helping to reduce traffic congestion, improve air quality, and support decarbonisation and the drive to net zero.
With support provided by RLB, Coventry City Council is pioneering the development of an urban Very Light Rail (VLR) system that can be built at a fraction of the cost of conventional tram and light rail schemes.
