Nick Cattini, Partner at RSM, shares his views.
The UK government's 10 Year Infrastructure Strategy committed at least £725bn of infrastructure investment to 2035. The government also established the National Infrastructure and Service Transformation Authority (NISTA) and passed the Planning and Infrastructure Act 2025 to improve project approvals, delivery confidence and coordination between government, investors and industry. Yet, despite a pipeline of over 180 projects and £920bn of planned delivery, civil engineering remains subdued. The construction PMI index has dropped considerably, with figures in line with the record lows of April 2020, when the country entered lockdown.
This contradiction reflects the difference between policy and delivery momentum. NISTA's first year focused on establishing the strategic framework, strengthening assurance and improving visibility of future workforce demand and investable opportunities. However, pipeline visibility does not automatically generate site activity. Many projects must still progress through design, funding approval, procurement, consents, utility interfaces and commercial negotiation before appearing in monthly output data. NISTA's delivery confidence assessments, which use RAG ratings to assess whether major projects will meet time and cost objectives, reinforce this point. At March 2026, only 29 projects (15% of those assessed) were rated “green”, suggesting most still faced significant programme challenges and delivery uncertainty.
The Planning and Infrastructure Act 2025 should help remove some of the long-standing barriers that have delayed major projects. Measures include:
- Reduced pre-application consultation requirements
- Streamlined Development Consent Order ("DCO") processes
- Regular National Policy Statement reviews
- Reduced exposure to repeated legal challenge risks
However, these are structural reforms, the benefits of which will take time to work through. The July 2026 implementation updates indicated that reforms could reduce pre-application time by up to 12 months, but they cannot immediately overcome current market caution or stalled investment decisions. This distinction is important.
Weak delivery therefore suggests that the UK's infrastructure challenge is no longer principally one of policy, but of mobilisation, capacity and confidence. NISTA's decision to refocus the Government Major Projects Portfolio from April 2026 on approximately 80 of the most complex and strategically significant projects points to more targeted delivery oversight. Its use of tiered assurance, expert intervention and digital tools, including an early warning system to flag projects at risk of moving to red, suggests government recognises delivery capability as the limiting factor.
Workforce availability remains a significant constraint on infrastructure projects. NISTA estimates that 629,000 to 706,000 workers will be required annually over the next five years to deliver the planned pipeline, considerably more than the current UK construction workforce. Shortages persist because of the workforce's long-term decline and ageing profile. The government recognises the scale of the challenge and constraints on delivering the UK’s housing and infrastructure projects.
The UK also remains heavily exposed to globally traded commodities. The greatest exposure sits in steel, aluminium, cement, copper and petrochemical-based products, all of which are heavily influenced by energy prices and global logistics costs. This matters because many of the infrastructure programmes are highly dependent on precisely these commodities.
Financial fragility across the supply chain also threatens project viability. High insolvency rates and persistent liquidity pressures affect subcontractors and SMEs operating on thin margins and stretched balance sheets, limiting their ability to scale and deliver the pipeline. Proposed construction retention reforms may improve fairness and cashflow for smaller firms but create transition risks for clients and main contractors that may require alternative security, revised payment structures or a deeper bond and surety market.
The evidence does not suggest that the UK's infrastructure challenge is one of ambition, policy or government intention. The more immediate risk is that chronic uncertainty prevents spades from going in the ground. Recent data from Glenigan points to this disconnect, noting a 17% increase in main contract awards in the three months to July 2026 compared to the previous three months, yet project starts for the same period comparison are down 7%.
In uncertain times, construction businesses should focus on resilience beyond short-term market volatility by strengthening business fundamentals. A robust balance sheet, disciplined cash management and appropriate liquidity provide flexibility to withstand project delays, cost inflation and economic uncertainty. Closer, collaborative relationships with key supply chain partners are equally important to improve visibility, manage risk and secure capacity.
With skills shortages remaining a significant challenge, businesses should consider how incentive arrangements, succession planning and long-term workforce strategies can attract, retain and develop critical talent. Effective adoption of artificial intelligence can also augment existing teams, automate routine tasks, enhance project and commercial decision-making and improve productivity, allowing skilled professionals to focus on higher-value activities. Organisations investing in both financial resilience and organisational capability are likely to be best placed to capitalise on future growth opportunities.
What is clear is that concern over delivery capacity is suppressing confidence and delaying project starts. Infrastructure pipeline investment must be matched with policy to target investment in areas such as technology and workforce, enabling projects to move more rapidly from pipeline to site. Failure to do so risks leaving the UK in a prolonged period in which investment intentions remain strong, but actual delivery continues to lag behind.
*the views expressed are the author's and not ICAEW's