Infrastructure policies critical in delivering UK government’s pro-growth agenda

Several important policies, targets and legislation around planning, infrastructure and industries are expected to be announced by the Labour government in 2025. This provides the prime minister with an opportunity to reclaim the narrative and clearly set out how his mission-driven approach will put the UK on a positive economic trajectory and improve people’s lives.

Getting them right is critical for the government as perceived policy missteps over means testing the winter fuel payment, controversy over gifts and donations, internal party discipline and decisions taken in the recent Autumn Budget have created uncertainty for businesses operating across the UK and dissatisfaction by the public.

Despite these challenges, the government has stuck rigidly to the five ‘Missions for Government’ that formed a key facet of its party manifesto and general election campaign, focused on demonstrating economic stability and unlocking economic growth. This approach has enabled it to deliver some tangible progress on manifesto commitments including the establishment of government-backed clean energy powerhouse GB Energy, initial reforms to the planning system, and passing legislation to bring passenger rail services into public ownership.

In the year ahead, infrastructure policy is likely to be placed front and centre as the vehicle to help the government deliver economic growth and enhance the quality of life for people living in communities across the country.

In the spring of 2025, the government is expected to introduce into parliament the Planning and Infrastructure Bill. This legislation is intended to expedite planning, including by streamlining the nationally significant infrastructure projects (NSIPs) regime. The changes to be set out in the bill are expected to include reforming how national policy statements are reviewed, updated and scrutinised by Parliament; modernising planning committees; and increasing capacity in local planning authorities. These reforms, according to the government, are set to make the planning system “an enabler of growth” as opposed to a blocker.

Following that, the government is expected to publish its ten-year national infrastructure strategy next summer. The highly-anticipated strategy will outline its plans for transport, energy, water, flood defence, waste, digital, housing and social infrastructure, as well as a credible delivery plan with the intention to encourage and unlock investment and so economic growth.

The strategy will be published alongside the multi-year spending review, which will effectively confirm how much public money will be allocated for infrastructure spending for a minimum of three years. At the same time, the government plans to launch the National Infrastructure and Service Transformation Authority (NISTA), a new entity within government formed by merging the National Infrastructure Commission and the Infrastructure and Projects Authority. It will lead on strategic planning of economic and social infrastructure projects as well as on their delivery.

With the government’s 2024 Autumn Budget promising an “end to short termism” which has often impeded infrastructure development and growth, the upcoming spending review and national infrastructure strategy have the potential to provide sufficient certainty for businesses involved in the project pipeline and demonstrate that the UK is open for investment. There is real doubt among project developers and investors, however, on what the government will do to encourage and enable private financing in public sector-funded infrastructure projects.

The Modern Industrial Strategy, which is also due to be finalised at the same time as the spending review, will seek to position the UK at the forefront of emerging industries and create the conditions and regulatory environment to attract investment into key growth-driving sectors such as clean energy.

Another significant legislative development in 2025 will be the English Devolution Bill, with a white paper to inform its development expected imminently. The bill will aim to radically redraw the structure of local authorities with increased devolution to the metro mayoral regions, providing them with enhanced powers over transport, housing and fiscal decision-making.

The upcoming legislative and policy initiatives present a crucial opportunity for the government to demonstrate its capability and capacity to deliver on its promises and foster a stable, investment-friendly environment. But the success of Labour’s policies will hinge on their effective implementation and the ability to engage constructively with the business community, local authorities, regulators and the public. The year 2025 will be pivotal in determining whether Labour can successfully transform its ambitious policy agenda into tangible improvements for the UK, ultimately proving that the country is indeed open for business and poised for a prosperous future.