InfrastructureEfficiency UKConstruction ProjectCostReduction

The Price of Progress: Why UK Infrastructure Costs Need Reform

*Securing the UK’s critical national infrastructure. Source: TechRadar*

The rising costs of infrastructure projects in the UK have been a significant concern for decades, with projects like High Speed Two (HS2), Hinkley Point C, and the Elizabeth Line making headlines for their high expenses and delays. Reducing these costs is essential for the UK to meet its infrastructure goals while staying within budget. Many sectors, particularly nuclear power and rail, have faced significant cost challenges, but the UK is not alone—projects like Berlin’s Brandenburg Airport and France’s Flamanville nuclear station have also struggled with cost overruns.

Commission analysis based on data from Oxford Global Projects (2024), examining the cost drivers of major infrastructure projects in the UK. Source: NIC

Key Causes of High Costs in Infrastructure

According to the National Infrastructure Commission, several interrelated factors contribute to high infrastructure costs in the UK. These include:

Lack of Clear Strategic Direction: A major issue is the absence of a long-term strategy and stable policy environment from the government. Without a clearly defined pipeline of priority infrastructure projects, private sector confidence falters, leading to underinvestment in the supply chain and inflated project costs. Successive short-term public spending decisions exacerbate this, making it harder to plan and deliver large-scale projects efficiently.

Challenges with Project Clients and Sponsors: Poor coordination between project sponsors and clients can lead to delays, mismanagement, and budget overspends. Often, project outcomes are defined without proper consultation on whether they can be achieved within the budget. This misalignment, combined with procurement challenges and insufficient project oversight, results in costly changes during construction.

Inefficient Consenting and Compliance: The planning and consenting process in the UK is notoriously slow and complex, adding unnecessary delays and costs. Major infrastructure projects like Hinkley Point C have experienced long waiting periods for approvals, leading to increased expenses. Further, risk-averse planning standards discourage innovation, forcing developers to adopt overly conservative measures that drive up costs without proportionate benefits.

Constrained Supply Chain: The fragmented nature of the UK’s construction sector limits its capacity to scale up effectively and meet demand. Lack of investment in skills development and productivity improvements within the industry compounds the issue. With no long-term strategic direction, the supply chain is left ill-prepared to handle the increased demand for large-scale infrastructure projects, driving costs higher due to constrained resources.

Solutions to Drive Down Costs

To reduce costs across UK infrastructure projects, the report suggests improving early-stage planning and design, encouraging innovation, and fostering repeatable project models. By investing in clear, long-term strategic direction and setting out a stable pipeline of projects, the government can boost industry confidence and foster a more efficient supply chain. Additionally, streamlining the consenting process and encouraging earlier engagement with contractors can help avoid delays and costly changes later in the project lifecycle.

Stylized system diagram highlighting key areas for improvement in UK infrastructure. Source: NIC

Ultimately, addressing these systemic issues will require a coordinated effort between government, industry, and other stakeholders. Only by tackling the root causes of inefficiencies can the UK achieve its infrastructure goals while delivering better value for money.

For more information the reader is referred to the detailed report crafted from the NIC (National Infrastructure Commission).

Sources: nic.org.uk, techradar.com