The UK government's 10-Year Infrastructure Strategy committed at least £725bn of infrastructure investment to 2035. Alongside this, the government established the National Infrastructure and Service Transformation Authority (NISTA) and passed the Planning and Infrastructure Act 2025, both designed to improve project approvals, increase delivery confidence and strengthen coordination between government, investors and industry. However, despite a growing pipeline of over 180 projects and £920bn of planned delivery, civil engineering remains subdued. Recent sentiment from the construction PMI index has dropped considerably, with figures in line with the record lows of April 2020 when the country went into lockdown.

This apparent contradiction is best explained by the difference between policy momentum and delivery momentum. NISTA's first year has focused on establishing the strategic framework, strengthening assurance and ensuring visibility of future workforce demand and investable opportunities. However, pipeline visibility does not automatically generate site activity. Many projects still need to progress through design, funding approval, procurement, consents, utility interfaces and commercial negotiation before they appear in monthly output data. This is reflected in NISTA's delivery confidence assessments, which use a RAG rating to assess the likelihood of major projects delivering their objectives to time and cost. At March 2026, only 29 projects (15% of the total assessed) were rated “Green”, suggesting the majority of projects still faced significant programme challenges and delivery uncertainty.

UK infrastructure pipeline faces delivery challenges

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.

The weakness in 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 to approximately 80 of the most complex and strategically significant projects also points to a more targeted model of delivery oversight. Its growing use of tiered assurance, expert intervention and digital tools, including an Early Warning System designed to flag projects at risk of moving to Red, suggests government recognises that delivery capability is now the limiting factor.

What is holding back UK infrastructure projects?

Workforce availability remains a significant issue. NISTA's workforce analysis estimates that between 629,000 and 706,000 workers will be required annually over the next five years to deliver the planned pipeline, a considerable increase on the current UK construction workforce, which the chart below shows has been flat in civil engineering. The sector continues to face shortages as a result of a long-term decline and ageing of the workforce. The Government clearly recognises the scale of this challenge, with reports indicating that a dedicated Construction Jobs Plan will be published before the end of 2026, reflecting growing concern that labour and skills shortages represent one of the most significant constraints on delivering the UK's housing and infrastructure ambitions.

As a consequence of geopolitical instability, the UK 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 expected to drive activity, including power networks, water, transport, renewables and defence, are highly dependent on precisely these commodities.

Financial fragility across the supply chain also remains a significant threat to project viability. Persistently high insolvency rates and stubborn liquidity pressures continue to affect subcontractors and SMEs operating on thin margins and stretched balance sheets, limiting their ability to scale and deliver the pipeline. Proposed reforms to construction retentions may improve fairness and cashflow for smaller firms, but they also create transition risks for clients and main contractors, who may need alternative security, revised payment structures or access to a deeper bond and surety market.

Why mobilisation is the next challenge for UK infrastructure delivery

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 these uncertain times, construction businesses would be well-served by adopting a mindset focused on building resilience. This extends beyond navigating short-term market volatility and requires a deliberate focus on strengthening the fundamentals of the business. Maintaining a robust balance sheet, with disciplined cash management and appropriate liquidity, provides the flexibility to withstand project delays, cost inflation and economic uncertainty. Equally important is developing closer, more collaborative relationships with key supply chain partners to improve visibility, manage risk and secure capacity.

At a time when skills shortages remain a significant challenge, businesses should also consider how incentive arrangements, succession planning and long-term workforce strategies can help attract, retain and develop critical talent. Alongside these measures, the effective adoption of artificial intelligence offers an opportunity to augment the capabilities of existing teams, automate routine tasks, enhance project and commercial decision-making, and improve productivity, allowing skilled professionals to focus on higher-value activities. Those organisations that invest 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.

For more information please contact Nick Cattini or your usual RSM contact.

Latest related insights