Our focus with PFI Fridays is often the expiry of the legacy PFI contracts from the 2000s/2010s and handback of those facilities into the public sector.
This week, we bring something a little different in light of the Budget delivered this week. We followed in anticipation of how the Government would look to deliver on its 10-Year Infrastructure Strategy, published in June 2025.
The strategy, developed by the National Infrastructure and Service Transformation Authority (NISTA), is extensive and plans to use private finance to support infrastructure delivery.
This was confirmed in the full Budget 2025 document - the moment the Public Private Partnerships (PPP) industry has been waiting for: a new wave of PPP models, learning lessons from the previous PFIs.
A Budget for infrastructure delivery?
What exactly did the Budget say about UK infrastructure and where will PPP be used? Here are some of the headlines:
Multi-year capital budgets to 2029–30 remain intact, maintaining commitments made in June under the Spending Review and the 10-Year Infrastructure Strategy.
This stability reduces the risk of stop-start investment cycles - good news for mobilising the workforce, securing supply chains, and attracting private finance.
Additional £1.7 billion capital investment, including £891m for the Lower Thames Crossing, building on June’s Spending Review.
250 Neighbourhood Health Centres announced, delivered through the NHS Neighbourhood Rebuild Programme, combining public funding with a new PPP model developed by NISTA. 120 to be operational by 2030.
Open to private finance to decarbonise the public sector estate (alongside or in place of government capital expenditure), where these offer value for money. HM Treasury will consider proposals based on business cases from relevant departments.
This marks a shift away from previous governments’ aversion to PPPs following PFI controversies.
Attention will now turn towards the models of PPP being used. LIFT (Local Improvement Finance Trust) was one of the most notable PPP programmes in health, delivering hundreds of primary care facilities in the 2000s. While successful in many areas, LIFT faced criticism over complexity and long-term cost.
There is also the Welsh Mutual Investment Model (MIM), which is widely considered a more realistic PPP model, with (i) the public sector often taking an equity stake in the SPV for more oversight and joint decision-making, plus (ii) whole life costing and maintenance ensuring assets are built to last.
Opportunities for investors and contractors
As well as the new Neighbourhood Health Centres and decarbonisation, the Budget signalled openness to private finance for new towns, further widening the pipeline and keeping housing targets in mind.
PPPs will create space for impact investors to align capital with social outcomes. Contractors can embed green energy solutions, decarbonisation measures, and social value commitments into bids, positioning themselves as partners in delivering net-zero and community benefits.
What does this mean for the local authorities?
This Budget signals a continued emphasis on infrastructure delivery, with PPPs back in the spotlight, but with promises of stronger governance and social value.
Planning reforms could help accelerate these developments by cutting consenting times and boosting local authority capacity, but they must be implemented effectively to avoid bottlenecks.
All of this comes at a time when Local Government Reorganisation (LGR) is reshaping structures and responsibilities. For authorities, it means a busy and complex period: managing new devolved investment, preparing for planning reforms, and navigating infrastructure partnerships - all while maintaining day-to-day services.
The importance of a consistent long-term plan, combined with planning reforms, makes private investment and growth stimulation more likely.
Now it’s on the industry, Government and investors to speed up delivery for this community-based infrastructure.
Operational PPP Summit: 1-3 December
This all sets the scene nicely for the Operational PPP Summit next week! Alex Lawrence and Emma Beynon are looking forward to attending this conference, where PPP stakeholders will be meeting to discuss the above and collaborating across sectors. We will be reporting back on that next week to our public sector clients and contacts. We’re here to help authorities and their partners make sense of this landscape, ensuring excellent project delivery for the communities.
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