UK Infrastructure Investment and the impact on construction

Infrastructure investment Ellis Fox Blog

A recent news article in the Guardian highlighted the UK government’s intention to buy a larger stake in Sizewell C – a major nuclear power plant development. The major reason cited is to reduce China’s stake in the project as well as subsequent influence on UK infrastructure. This is similar approach that was taken when 5G infrastructure was being developed and the UK chose to exclude Chinese firms from the opportunity. Without going into the political debates behind these decisions, three major factors remain:

  • UK infrastructure requires significant upgrades
  • Major funding is required to make this happen
  • Infrastructure development needs to align with net zero goals

The question is whether it’s possible to achieve all three of these objectives while keeping everything local? For the construction industry there are still major opportunities in infrastructure development, but the challenge is getting the numbers to work. Rising resource costs, skills shortages and a general slowdown in funding availability may require a new approach to developing infrastructure. Where to start?

One consideration is to start with net zero and sustainability, seeing it as an opportunity rather than constraint. Advances in technology and innovations in methodology and materials has many potential benefits. Research from end 2019 indicates that a quarter of materials sourced for construction end up as waste.  The opportunity is not only to reduce the percentage of waste to improve the efficiency of projects but to seriously consider ways to reuse or repurpose materials and to partner with waste management companies that are recycling materials for alternative construction purposes.  When the applications of these materials are understood, it opens up new avenues of efficiency to explore. But more significantly it can play a major role in attracting the investment needed to fund  projects.

A leading trend in investments is towards greater sustainability. Many infrastructure and construction project tenders carry with them a carbon reporting requirement. Main contractors that have been proactive in prioritising sustainability and achieving net-zero construction are already reaping the benefits. They have supply chain networks in place, they have systems implemented to track carbon and their operations are geared towards decarbonisation. It’s not surprising that these are the same main contractors winning major infrastructure frameworks.

The success of being able to develop the infrastructure the UK needs, will largely depend on how companies progress in building more efficiently and more sustainably, and is also the key to attracting investment.