Browne Jacobson and CBI roundtable

Browne Jacobson, in partnership with the Confederation of British Industry (CBI), hosted a roundtable discussion focused on the future of public infrastructure financing following the private finance initiative (PFI). This gathering brought together business leaders from various sectors to emphasise the need for a clear government strategy to build essential infrastructure such as roads, railways, prisons, schools, and hospitals.

The discussion highlighted several economic factors crucial for fostering business confidence in public infrastructure investments. These include the need for sustainable skills supply, long-term policy certainty, and positive messaging about the future economic outlook. Browne Jacobson called on the new government to identify a viable public-private partnership model for financing infrastructure projects ahead of the upcoming Autumn Budget scheduled for October 30.

PFI was used extensively in the UK between 1992 and 2018, with over 700 schemes completed. Under this initiative, private companies would cover upfront construction costs and recoup these expenses through long-term payments from public authorities, such as NHS trusts or local councils. However, PFI has faced criticism for perceived inefficiencies and poor value for taxpayers, especially when investors benefited from refinancing debt at lower rates after the initial construction phase.

Craig Elder, a Partner at Browne Jacobson with experience in high-value PFI projects, acknowledged the negative perceptions surrounding PFI but noted its role in building vital public infrastructure. He stated, “In the absence of any replacement, we are now falling behind other major economies in delivering infrastructure, with the assets we do build being both the most expensive and delayed in the G7.” Elder emphasised that the government must develop a new financing model that addresses past shortcomings to ensure better value for taxpayers while remaining appealing to private investors.

Alternative financing models are being explored, including a proposal from the Future Governance Forum for infrastructure investment partnerships. This model draws from the non-profit distributing framework used in Scotland and mutual investment approaches in Wales, focusing on community benefits, long-term collaboration, and greater local control over infrastructure projects.

Approximately 20 business leaders from organisations such as E.ON, Lloyds Banking Group, Aggregate Industries, Nottingham College, and De Montfort University participated in the roundtable at Browne Jacobson’s Birmingham office. Rain Newton-Smith, CEO of the CBI, chaired the meeting, which also addressed Labour’s economic and employment policies and discussed priorities for the upcoming Autumn Statement.

Newton-Smith highlighted the importance of private investment in public sector infrastructure for regional growth, stating, “It was great to host a roundtable with Browne Jacobson with over 20 business leaders to discuss business priorities ahead of the Autumn Budget. This is a crucial moment in our growth journey – and we must take this opportunity to use the available levers to boost investment.”

The roundtable's discussions reflect a growing urgency for the government to articulate a clear vision for public infrastructure investment, crucial for driving economic growth and addressing infrastructure deficits in the UK.

Photo - Browne Jacobson partners Peter Ware (left) and Craig Elder (second right) with (L-R), the CBI's Nikki Paterson, Rain Newton-Smith, and Mark Goldstone