Beyond the Budget: How can businesses work with the Government to solve the UK infrastructure investment challenge?
An opinion
Chancellor Rachel Reeves referred to the Autumn Budget as a chance “to wipe the slate clean and to put our public finances on a firm trajectory.” Central to this was the £35 billion investment in economic infrastructure.
Many businesses, particularly those in industries aligned with infrastructure and green innovation, stand to benefit from the government’s infrastructure investments. But to do so, it’s essential for them to understand where the government is likely to direct its investments and how they can align their strategies accordingly.
In this article, we’ll explore the opportunities and challenges within the UK’s infrastructure strategy, focusing on how businesses can capitalise on revenue-generating assets and public-private partnerships (PPPs) to drive sustainable investment and provide long-term value.
The case for revenue-generating infrastructure
With £22 billion in unfunded spending pressures already straining public finances, the government faces a daunting challenge: how to balance immediate fiscal demands with the need to fund transformative, revenue-generating projects that drive growth, decarbonise the economy and build resilience.
Revenue-generating assets like power generation and ports offer steady income streams, making them attractive to private investors who seek reliable returns. Projects in renewable energy, EV charging networks and vertical farming also align with sustainability goals, addressing the nation’s environmental commitments while attracting environmentally conscious investors.
Because these assets have clear revenue pathways, the government can use private capital under more favourable terms, borrowing at lower interest rates and reducing taxpayer burden. By channelling profits from these investments into public services rather than private equity, the government can ensure these returns benefit the broader public.
Revenue generating assets could be broken down and defined further as long vs short term revenue generators (e.g. some investments start to throw out yield quickly, whereas others have a deficit period of several years to fund), and direct vs indirect revenue generators (e.g. investing in schools and hospitals will indirectly have beneficial outcomes to Treasury income). It would be a valid strategy to make sure that the UK Government’s capital budget is allocated across both axis.
With this definition in mind, there is a good argument that capital does not only need to be invested in the UK; the Spanish state have bought up British rail assets, Canadian state funded pension funds own large stakes of our water infrastructure and so on; if infrastructure as an investment class has a stable and consistent yield to supplement Tax income then there is an argument that the utility of capital to the state exceeds the physical asset itself so why not explore buying ports, transport, datacentre and energy infrastructure in other countries too as one part of the capital portfolio.
What would this mean for businesses?
A focus on revenue-generating infrastructure would create new opportunities in energy, utilities and transportation, where the need for technology and equipment is rising. Companies specialising in renewable technologies, construction or sustainable services can position themselves as key suppliers or partners in these projects.
Expanding PPPs to attract private capital
One approach to bridging the funding gap is expanding PPPs. By partnering with private investors, the government can tap into external funding and expertise, particularly for large-scale projects that would be unaffordable through public funding alone. Ports, airports and railway networks are particularly well-suited for PPPs, as they provide stable revenue streams that can support private returns while keeping assets under public control.
To attract further private capital, the government can implement direct incentives such as tax reliefs and investment credits targeted at green infrastructure. These incentives could be particularly valuable for sectors like renewable energy and charging networks, where long-term returns are attractive but upfront costs are substantial. With the right incentives, the government can draw in private capital on terms that make these investments mutually beneficial, offering long-term gains for the public and stable revenue for investors.
What would this mean for businesses?
PPPs open up a pathway to directly contribute to major infrastructure projects. Medium- and large-scale businesses in engineering, construction, logistics and finance can engage as strategic partners, suppliers or subcontractors on these projects. Direct investment incentives—such as tax reliefs and investment credits—are especially appealing to companies working in renewable energy and green transport, helping them manage upfront costs and compete for public contracts.
Prioritising green infrastructure investments
Another powerful way the government can reinvest in communities is by supporting green infrastructure projects, such as EV charging networks, renewable energy assets and low-carbon transport. Green bonds and sustainability-linked loans can help fund these projects by appealing to investors prioritising environmental responsibility.
Grid connection upgrades are crucial to supporting renewable energy expansion, ensuring that generated power is efficiently transmitted across the country. This will help address infrastructure and climate goals in one integrated approach, drawing capital into projects that deliver long-term public benefits while advancing the UK’s ambitious goal of achieving net-zero emissions by 2050.
What would this mean for businesses?
The government’s green infrastructure push represents an alignment with sustainability goals and market demand. Companies in green technology, energy storage and emissions reduction solutions can use government initiatives to expand their market reach. Green infrastructure investments also provide businesses with options to lower operational costs through renewable energy sources, supporting both profitability and environmental commitments.
Bringing benefits to the public purse
A huge factor in this Budget’s success will be the extent to which infrastructure investments benefit public finances, rather than solely generating profit for private equity firms. By retaining ownership of revenue-generating assets and channelling profits into the public purse, the government can fund essential services like healthcare, education and social care, which are currently strained by fiscal constraints.
For example, vertical farms and grid connections could provide steady returns that contribute directly to public service budgets. This reinvestment model not only addresses immediate infrastructure needs, but also strengthens essential public services without increasing public debt, creating a cycle where infrastructure profits feed back into the economy and benefit communities.
What would this mean for businesses?
Businesses can play a significant role in this reinvestment model, especially companies that supply services or technologies to infrastructure projects. By participating in projects that generate public benefits, companies contribute to a more resilient economy and sustainable public services. This also aligns with a growing expectation for businesses to be responsible corporate citizens, which can improve brand perception and attract socially conscious investors.
What action should businesses take now?
The UK’s post-budget infrastructure strategy provides significant opportunities for businesses, particularly in sectors that align with public revenue-generating projects in energy, transport and green infrastructure.
Businesses can take the following actions now to capitalise on these opportunities:
- Explore partnership opportunities: Businesses, particularly those in energy, transportation, and digital sectors, should look into public-private partnerships (PPPs) or government-backed projects where they can bring specialised expertise or resources. These collaborations can provide access to funding, resources, and expanded networks, allowing businesses to scale with reduced financial risk.
- Invest in sustainable operations: Companies that adopt sustainable practices—such as renewable energy sourcing, electrification, and waste reduction—will be well-positioned to benefit from tax incentives and investment credits. By aligning with government goals for green infrastructure, businesses can lower operational costs and enhance their appeal to environmentally conscious consumers and investors.
- Position as strategic suppliers: Many infrastructure projects will require services, technology, and equipment from private sector suppliers. Businesses should position themselves as reliable partners for government-backed initiatives, which can diversify revenue streams and build resilience in a rapidly evolving market.
- Explore tax and investment incentives: Businesses involved in renewable energy, low-carbon transport, and digital infrastructure should explore available incentives like tax reliefs and investment credits. These can reduce upfront costs, support expansion, and enhance competitiveness in fast-growing sectors.
The government faces a significant challenge in balancing immediate fiscal demands with the need for transformative infrastructure investments—and businesses play a crucial role in bridging this gap. By aligning with national infrastructure objectives, businesses can both contribute to the UK’s growth and enhance their own market position in a sustainable and resilient future economy.
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We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.
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