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Infrastructure finance

Both economic infrastructure (roads, rail, energy, water, communications) and social infrastructure (schools, hospitals, housing) provide services that are essential to daily life and economic success. HM Treasury's National Infrastructure Plan has identified over £450 billion of planned investment in economic infrastructure that is needed to replace ageing assets, help meet policy commitments, and meet our growing population’s needs, over the next decade and beyond. Infrastructure takes years to build, and is generally long-lived, requiring a long-term public policy perspective.

Infrastructure is ultimately funded through taxes or through consumer bills and charges. The finance, however, can be raised either publicly or privately, with varying combinations of public and private financing being possible. We have an extensive back catalogue of reports following the evolution of the Private Finance Initiative. More recently we have reported on new forms of finance (infrastructure guarantees, Thames Tideway Tunnel) and the choices available to government over whether to use public or private finance, as well as the impact of infrastructure investment on consumer bills and whether bills will be affordable.

Key NAO publications:

The choice of finance for capital investment (Mar 2015)
Lessons from major rail infrastructure programmes (Oct 2014)
Review of the VFM assessment process for PFI (Apr 2014)
HM Treasury: Planning for economic infrastructure (Jan 2013)
Private Finance Projects (Nov 2009)

PFI and PF2

A briefing on the rationale, costs and benefits of the Private Finance Initiative; the use of and impact of PFI, and ability to make savings from operational contracts; and the introduction of PF2. There are currently over 700 operational PFI and PF2 deals, with a capital value of around £60 billion and annual charges for these deals amounted to £10.3 billion in 2016-17. Even if no new deals are entered into, future charges which continue until the 2040s amount to £199 billion.

18 January 2018

Sector(s): Central Finance and Treasury, Private Finance

Performance Improvement area(s): Infrastructure finance

Department(s): HM Treasury

Published:
18 Jan 2018

The Green Investment Bank

This examines whether the Department for Business, Energy & Industrial Strategy has achieved the objectives of the UK Green Investment Bank intervention, and whether UK Government Investments has achieved value for money in the subsequent sale of the Bank.

Sector(s): Business and enterprise

Performance Improvement area(s): Asset sales and privatisation, Infrastructure finance

Department(s): Department for Business, Energy and Industrial Strategy

Published:
12 Dec 2017

Hinkley Point C

The Department has committed electricity consumers and taxpayers to a high cost and risky deal in a changing energy marketplace. We cannot say the Department has maximised the chances that it will achieve value for money.

Sector(s): Business and enterprise, Energy and environment

Performance Improvement area(s): Infrastructure finance

Department(s): Department for Business, Energy and Industrial Strategy

Published:
23 Jun 2017

Review of the Thames Tideway Tunnel

This report examines the evidence base supporting the decision to proceed with the Thames Tideway Tunnel, a tunnel running 25 kilometres from Acton to Abbey Mills, as well as progress achieved to date.

Sector(s): Central Finance and Treasury, Energy and environment

Performance Improvement area(s): Infrastructure finance, Managing major projects

Department(s): Department for Environment Food and Rural Affairs

Published:
2 Mar 2017

The choice of finance for capital investment

The NAO publishes a briefing paper considering capital investment by government and how it chooses to finance it.

Sector(s): Central Finance and Treasury

Performance Improvement area(s): Financial management, Infrastructure finance, Strategic centre of government

Department(s): HM Treasury

Published:
17 Mar 2015

UK Guarantees scheme for infrastructure

Under the Scheme, the Treasury guarantees that lenders to infrastructure projects will be repaid in full and on time, irrespective of project performance. The NAO is calling for the Treasury to be rigorous and objective in assessing whether the guarantees, which transfer risk to the public sector, are genuinely needed.

Sector(s): Central Finance and Treasury

Performance Improvement area(s): Economic growth, Infrastructure finance

Department(s): HM Treasury

Published:
28 Jan 2015

Lessons from major rail infrastructure programmes

This review of five major rail projects highlights lessons the Department for Transport should apply to current and future rail programmes.

Sector(s): Infrastructure, Transport

Performance Improvement area(s): Infrastructure finance, Managing major projects

Department(s): Department for Transport

Published:
29 Oct 2014

Early contracts for renewable electricity

The Government awarded, without competition, £16.6 billion worth of early contracts to eight renewable generation projects at risk of investment delay.

Sector(s): Energy and environment, Regulation, consumers and competition

Performance Improvement area(s): Infrastructure finance, Managing major projects, User choice and consumer protection

Department(s): Department for Business, Energy and Industrial Strategy

Published:
27 Jun 2014

Oversight of three PFI waste projects

All three projects examined by the NAO have experienced significant delays stemming from a range of problems.

Sector(s): Energy and environment

Performance Improvement area(s): Infrastructure finance

Department(s): Department for Business, Energy and Industrial Strategy

Published:
17 Jun 2014

Maintaining strategic infrastructure: roads

The lack of predictability of funding for highways authorities has practical implications for road networks and may lead to increased costs in the long term.

Sector(s): Infrastructure, Local services, Transport

Performance Improvement area(s): Infrastructure finance, Managing assets and liabilities

Department(s): Department for Transport

Published:
6 Jun 2014