Weekly Policy Update |
up to Friday 20th June 2025
Information provided by National Constructing Excellence
The week in policy
Government publishes its 10-year Infrastructure Strategy
The government published the much-anticipated 10-year Infrastructure Strategy.
- Total commitment of at least £725 billion in public economic and social infrastructure over the next decade, with funding growing at least with inflation—a significant boost from +£120 billion announced by Spring 2025
- Strong focus on certainty: multi‑year funding for schools, hospitals, prisons, flood defense (up to 10 years out) to allow better planning and execution.
New Institutional Framework
- NISTA (National Infrastructure & Service Transformation Authority), based in HM Treasury, merges strategy and delivery oversight. Responsibilities include identifying major projects, providing expert assurance, and coordinating private finance.
- Enhanced project appraisal via refreshed Green Book, including “place-based business cases” considering regional interdependencies
Infrastructure Pipeline & Planning
- Launching interactive Infrastructure Pipeline portal in July 2025: a live roadmap of key public and private projects for the next 10 years, regularly updated—intended to stimulate investment and build supply-chain confidence
- Introducing a spatial planning approach: using a national digital tool to coordinate infrastructure across sectors (energy, transport, housing, environment) and across regions
Private Investment
- Active measures to crowd in private capital: through pensions, the National Wealth Fund, Office for Investment, and new PPP models for revenue-generating infrastructure
- Regulatory coordination and updated regulation strategy due by end of 2025.
Regional & Place‑based Growth
- Large investments in transport and connectivity:
- £24 billion for national/local roads
- £15.6 billion via Transport for City Regions (e.g., West Yorkshire Mass Transit)
- £2.5 billion for East West Rail (linking Oxford–Cambridge corridor)
- Continued HS2 and Lower Thames Crossing funding assets.publishing.service.gov.uk
- Housing support: 1.5m homes planned via Affordable Homes Programme, backed by a £39 billion successor and a new £16 billion capitalized National Housing Bank assets.publishing.service.gov.uk.
- Infrastructure capacity in water, energy grids, and flood resilience are being boosted to serve this growth.
Clean Energy Ambitions
- Target: 43–50 GW offshore wind, 27–29 GW onshore wind, and 45–47 GW solar by 2030, with gas under 5 % of power through Contracts for Difference assets.publishing.service.gov.uk.
- £9.4 billion for CCUS (clusters like East Coast, HyNet), £500 million+ for hydrogen network.
- Nuclear expansion: financing Sizewell C, advancing SMRs, fusion via £2.5 billion to STEP.
- Great British Energy public investment arm backed by £8.3 billion.
- Decarbonization programs across homes (£13.2 bn Warm Homes Plan), transport (£2.6 bn EV infrastructure), and waste sector.
Social Infrastructure Renewal
- Health: £70 bn (2025–30) + £49 bn (2030–35) for hospitals, including replacing unsafe RAAC buildings.
- Education: £38 bn through 2029–30, almost £20 bn on rebuilding ~500 schools, with condition improvements funded to 2035 assets.publishing.service.gov.uk.
- Justice: 14,000 new prison places by 2031, and £600 million per year average maintenance funding.
Environmental Commitments
- £500 million (Nature & Marine Restoration Funds) to streamline planning obligations and bolster nature-based infrastructure.
- £7.9 billion in flood defenses over 10 years, protecting ~840,000 properties.
- Integration with devolved administrations in NI, Scotland, and Wales to align broader UK-wide infrastructure plans.
Retrofit funding in the government’s Spending Review
£13bn funding commitment for home retrofit in the Labour manifesto will be retained. Information on how this will be deployed emerging over the past two weeks suggests that £5bn of this will be for financing – presumably for owner occupier retrofit loans, which would be a new part of the policy mix. Additionally, we understand that as part of the Spending Review the government has decided to end new funding for the Public Sector Decarbonisation Fund (PSDF) for retrofit (low carbon heating and energy efficiency) in public sector non-domestic properties. Current PSDF contracts will run to 2028. This is a potentially worrying development with overall carbon emission reductions from public buildings having stalled over the last decade. Local Government Chronicle published an article on this.
500,000 homes to be built through new National Housing Bank
MHCLG set out further detail on the new National Housing Bank that had been trailed at the recent Spending Review. The new government-backed fund will be publicly owned and supported with £16bn of financial capacity on top of £6bn of existing finance to be allocated this parliament. It will function as a subsidiary of Homes England, which will seek to leverage an additional £53bn of additional private investment to build over 500,000 new homes to help reach the government’s overarching 1.5m target. Through a new remit, Homes England will be able to issue government guarantees directly and have greater autonomy and flexibility to make long-term investments. It will also support small and medium sized enterprises with new lending products and enable developers to unlock large, complex sites through infrastructure finance.
Civil engineering market study
The Competition and Markets Authority (CMA) is undertaking a market study into the supply of railway and public road infrastructure by the civil engineering sector. Civil engineering market study – GOV.UK
Government announces expansion of the Warm Homes Discount
The government announced that millions of households will see their energy bills reduced by £150 this winter as part of an expansion of the Warm Homes Discount – a discount on energy bills for low income households. An additional 2.7 million households will benefit, raising the total to six million households.
Government announces £500bn investment for hydrogen infrastructure
The Department for Energy, Security and Net Zero (DESNZ) announced £500m to support the development of the UK’s first regional hydrogen transport and storage networks. The government expects the funding to “help create thousands of skilled jobs across industrial regions including Merseyside, Teesside, and the Humber.” The investment aims to connect hydrogen producers with industrial users such as power stations and manufacturing facilities, supporting the government’s broader plan for change and industrial strategy ambitions to become a clean energy superpower.
Cambridge Institute for Sustainability Leadership (CISL) reports on the business case for integrated retrofit
CISL published a report setting out the business case for integrated home retrofit. CISL calls for a coordinated approach involving government, financial institutions and insurers to unlock greater investment in the UK’s retrofit sector.
Lords launch inquiry into Building Safety Regulator delays
The House of Lords has launched an inquiry into complaints about construction delays caused by the Building Safety Regulator (BSR). The House of Lords Industry and Regulators Committee, chaired by Baroness Taylor of Bolton, has launched an inquiry into building safety regulation, with a particular focus on the work of the Building Safety Regulator, which was established following the Building Safety Act 2022. The Committee invites interested individuals and organisations to submit evidence by 31 August 2025. Call for Evidence – Committees – UK Parliament
In the news
Major project bidders to face ‘British jobs’ test | Construction Enquirer News
Mark Wild radical reset plan to rescue HS2 | Construction Enquirer News
UK ministers urged to ‘get on’ with stronger homebuyer protections
Coming up next week
Tuesday 24 June: There will be oral questions in the House of Lords on working with local authority leaders on energy efficiency and fire safety measures.