The future of UK infrastructure: how the sector can prepare for and manage change
Published on 2nd October 2025
What has changed, what is urgently needed, and how can the industry deliver at scale?
Who knew that $105 trillion dollars would buy enough doughnuts end-to-end to build a bridge from here to the edge of the solar system? That $105 trillion is McKinsey's estimate, in its recent report "The Infrastructure Moment", of investment necessary through to 2040 to meet the need for new and updated infrastructure globally. At Osborne Clarke’s second annual Future of Infrastructure event on 24 September 2025, industry leaders came together to translate that $105 trillion estimate into practical action: to consider what has changed, what is urgently needed, and how to deliver at scale.
Keynote speaker Richard Threlfall (outgoing Global Head of Infrastructure, Government & Healthcare at KPMG) set the scene with five ways infrastructure has transformed in just two decades, before focusing on climate, inequality and delivery. He highlighted that infrastructure is responsible for 80% of the UK's carbon emissions so if the UK is to reach net zero it is in the hands of the infrastructure sector to deliver it.
A cross-sector panel then tested those themes from the vantage points of energy, social infrastructure and public-private partnerships (PPP), transport and digital infrastructure/data centres. The panellists grappled with the ideas of infrastructure intersections and interdependencies while delivering at a programmatic level and incorporating advancement in technology, particularly AI.
Significant changes over two decades
Two decades ago, infrastructure scarcely existed as an investable category; today it is a mainstream asset class with dedicated platforms, deep liquidity and institutional governance, typified by marquee manager consolidation such as BlackRock–GIP. This depth of capital is positive for the UK pipeline, but it also compresses core returns and raises the premium on disciplined underwriting and active risk management.
Policy has caught up with the sector’s duration: most governments now anchor plans over decades, and the UK’s summer package was praised for its breadth, pragmatism and coherence. Execution still hinges on consenting, grid connections and procurement capacity, but clearer signals are unlocking platform investment rather than one‑offs.
Climate now sits at the centre of the thesis. As the chief driver of emissions and adaptation spend, infrastructure will determine net‑zero credibility: near‑term opportunity spans renewables plus storage, grid reinforcement, electric vehicle charging, heat networks, hydrogen/carbon capture and storage enablers and resilience assets from flood defence to water quality.
Rising prosperity and digitalisation are reshaping demand; in the UK, affordability and community benefit are decisive for social licence and therefore timetable, capital expenditure and exit multiples.
The digital revolution is finally embedded: high‑fidelity twins and AI‑driven analytics accelerate optioneering, improve construction certainty and enable predictive maintenance – provided data quality, interoperability and cybersecurity are contractually secured.
Financing conditions are manageable but tighter: higher rates reset internal rates of return and prioritise indexed cash yield, while supply‑chain fragility persists in specialist components and labour. Competition for core remains intense; moving up the risk curve is viable where investors control delivery, digitise operations and build repeatable capex platforms.
The consensus was that the UK remains a compelling, stable destination: the sector should lean into the transition, invest in resilience, and own the capability to deliver.
Where investment is most urgent
The panel concluded that capital deployment is most needed across five interlocking fronts:
Resilience and adaptation. In 2024, natural catastrophes drove $328 billion of losses, of which only 42% were insured (Swiss Re). The protection gap is widening, and many businesses continue to underestimate climate exposure; sustained investment is required to harden and retrofit the existing asset base, not just to build anew.
Decarbonisation paired with smarter demand. Global energy demand rose 2% in 2024 and emissions hit a record high despite rapid growth in wind and solar (Energy Institute, 2025 Review). Accelerating clean generation is essential, but so too is intelligent demand-side management—efficiency, flexibility and load-shifting—to stabilise systems and contain costs.
Inclusive growth. Inequality within countries has widened sharply, and roughly 92% of the UN Sustainable Development Goals are infrastructure-related; directing capital toward access, affordability and resilience will be critical to durable, investable outcomes.
Developed markets need substantial reinvestment to renew ageing transport, water and grid assets, where replacement cycles, reliability requirements and regulatory frameworks can support long-dated capital investments and returns on that capital deployed.
Finally, digital connectivity has become foundational. Data centres, interconnectors, satellites and fibre underpin modern economies and AI-driven demand, yet face binding constraints on power availability, cost inflation and siting. The opportunity – and the challenge – for sophisticated investors is to underwrite these needs with disciplined risk allocation, credible delivery and thoughtful stakeholder engagement.
Turn strategy into coordinated delivery
The UK now has clearer strategic direction. The panel's view was that focus now needs to be on enablers, not new bureaucracy. Delivery at scale and speed requires better skills and data, interoperable systems and clear governance between the centre and devolved/local decision-makers. Programmatic delivery, moving all the pieces on the board at the same time is becoming the best, and perhaps only, option to deliver what is needed.
It was felt that consideration should be given to a structured “accord” between government and industry (as New Zealand did with its Construction Accord) to lock in roles, behaviours and delivery commitments.
Energy and digital participants stressed the need for first‑ready, first‑connected grid reforms, standardised and transparent connection data, and resourced planning authorities. Energy delivery underpins so much other operational infrastructure (such as schools, hospitals, EV charging, data centres) it cannot be left "doing its own thing" or tied purely to certain asset classes. They argued that spatial planning should join up dedicated power solutions (including private wire and storage) to the infrastructure that needs it and is ready to be deployed to avoid piecemeal, duplicative consents or frustrations at a mismatch between power availability and other infrastructure becoming operational.
Use private capital confidently and consistently
The panel agreed that private capital can and should be deployed confidently and consistently across UK infrastructure. The UK is steadily reopening well‑defined routes for public–private delivery. Direct Procurement for Customers in the regulated water sector, Wales’s Mutual Investment Model, and exemplar projects such as the Silvertown Tunnel demonstrate that standardised, repeatable models shorten timetables, reduce transaction costs and deliver clear value for money. In this environment, replication beats reinvention; focusing on fit‑for‑purpose requirements rather than gold‑plating preserves pace without compromising outcomes.
Returns should be understood as the transparent price of capital and risk transfer rather than a pejorative, no different from the accepted cost of a mortgage. When government provides clear, predictable frameworks for risk, performance and reward, deeper pools of private finance mobilise at a lower blended cost and with greater resilience through cycles.
The policy framework is also moving in a supportive direction. HM Treasury’s Green Book is evolving to capture whole‑life and societal benefits (resilience, decarbonisation, productivity and social value), unlocking investment at scale. Outcome‑based specifications invite innovation, reduce whole‑life cost and carbon, and minimise disruption, while programme‑level finance and platform approaches, including offsite and design for manufacture and assembly, deliver more, faster, than bespoke megaprojects. A visible pipeline with standardised contracts, risk allocation and data will keep the UK an attractive, bankable market for long‑term private capital.
Osborne Clarke comment
The opportunity in UK infrastructure is larger – and more investable – than at any point in recent memory. Strategy is clearer, technology is ready, and capital is available. The imperative for the sector now is coordinated delivery enabling decisions to be taken in the right order, at programme scale, with communities engaged on the real benefits. Joining the infrastructure development ambition to the technical capacity to deliver will be the biggest challenge over the next 12 months.
Energy: Priorities are grid and planning reform; shifting from concrete and copper to data and intelligence; and creating predictable, evidence‑based frameworks that give investors “capital confidence.”
Social/PPP: The UK PPP market is being redefined, but clarity is needed on pipeline, use-cases and the role of the National Infrastructure and Service Transformation Authority (NISTA). Collaboration on asset hand-back will shape trust – and the next wave of projects.
Transport: Devolution will push more decisions and funding to city regions. There is a need to move away from specification‑driven contracts and let the supply chain innovate to deliver decarbonisation, capacity and legacy outcomes.
Digital: Demand is unprecedented, but power availability and cost are constraints. There is a need for broader geographic spread beyond London and the South East, integrated planning for power plus compute, and (in the short term) pragmatic bridging solutions while new capacity comes online.
Osborne Clarke advises across the full infrastructure lifecycle: from strategy and policy, to planning and consenting, PPP and private capital structures, grid and digital enablement, contracting models, and delivery oversight. If you would like to discuss any of the themes above, please get in touch with your usual Osborne Clarke contact.
