Investors call for renewed PPP model to deliver UK infrastructure

AIIP report urges Budget reforms to unlock capital for hospitals and major works

A coalition of leading infrastructure investors has urged ministers to allow a new generation of public-private partnerships (PPPs) to tackle the UK’s backlog of hospital, health and infrastructure projects.

The Association of Infrastructure Investors in Public Private Partnerships (AIIP), chaired by former Labour cabinet minister Lord Hutton, said investors are ready to back schemes if the Autumn Budget sets out clear rules for renewed collaboration. Chancellor Rachel Reeves will deliver the Budget on 26 November 2025, against a backdrop of fiscal pressure and uncertainty.

The AIIP represents major international funds and pension investors, who say they are prepared to commit long-term capital to sectors including new hospitals, acute care facilities, major infrastructure schemes and local service buildings, if government provides a clear framework.

Past lessons, future reforms

The report highlights that 90 hospitals were built in less than a decade under PFI, with over £10 billion invested (around £17.8bn today). By contrast, the New Hospital Programme announced in 2020 has faced repeated delays, with some schemes not expected to start construction until 2039.

While PFI schemes drew criticism for inflexibility and poor value in some cases, analysis by the National Audit Office and Infrastructure Partnerships Australia has shown PPPs were three times more likely to be delivered on time and on budget than traditional procurement.

The new AIIP proposals aim to address previous failings with 35 recommendations across seven areas. These include:

• independent certifiers to provide impartial oversight during construction,
• greater transparency through breaking down unitary charges,
• digital twins to track long-term performance,
• reducing unnecessary complexity in contracts, which sometimes contained 500+ performance measures.

Investors also pointed to successful PPP models abroad, such as Australia and New Zealand’s “precinct model”, which combines health, education and community facilities in single place-based schemes and has delivered better value than traditional procurement.

Lord Hutton said: “We urgently need to inject the NHS with billions to repair our crumbling estate and build new capacity to meet the health challenges of the next 20 years. New partnerships with private investors could unlock billions to cut waiting lists, reduce serious clinical incidents and improve accountability.”

The AIIP warns that without reforms, capital will flow to overseas markets with clearer PPP frameworks. But with change, investors believe a renewed partnership model could contribute to £1 trillion of UK infrastructure investment over the coming decades, while directly tackling the NHS’s £49bn maintenance backlog.