In this short video, Phil Kent, CEO at Gravis, gives an overview of the UK’s 10-year Infrastructure Plan. He details the sectors earmarked for both public and private investment, and explains the financial models that will be used.

A full transcript is below.

The government published its 10-year Infrastructure Plan earlier this year, and that's really a plan for how infrastructure is going to have a key role to play in supporting the government's long-term growth ambitions.

The headline commitment was a £725 billion public sector spend across a range of sectors. Health care came out quite strongly, with a £70 billion commitment, but other sectors like transport and housing also had key roles to play. For the first time, we saw defence featuring in an infrastructure plan as part of the 2.6% of GDP commitment that the government has made for defence spending.

Probably more relevant to the private sector was around a £500 billion investment over the next 10 years that the government pointed to, and that was focused in three key areas: clean energy and energy more broadly, consistent with the Clean Power Plan that's £40 billion a year over the next five years to support the UK's transition to a low carbon grid; digital infrastructure was pointed to with around £5 billion per year investment requirement; and then the water sector also featured for the private sector, with around £104 billion in commitments. And that's what's been approved as part of the current price control.

I think other interesting areas of the plan for me were the fact that the government pointed to the role of a number of public sector bodies such as the National Wealth Fund, the British Business Bank, Great British Energy and The National Housing Bank, which was a new bank that was announced as part of the plan to support public investment into different areas, but also to support private sector investment through what was termed financial guarantees. And that could be co-investment in debt or equity alongside the private sector, but also providing models like guarantees to attract investment. And we saw some of that recently in the case of Sizewell.

The government has been pretty consistent, and this was echoed in the plan in terms of the long-term revenue support model. So, thinking about GCP infrastructure Investments Limited and the funds we manage at Gravis, they're focused on those sectors that have long term public sector revenue support. And the government pointed to the regulated asset-based model, again, that featured heavily in the recent Sizewell announcement, but also the Contract for Difference model, which we've recently seen extended away from its traditional beneficiaries in power generation to sectors like carbon and hydrogen business models. And we can expect, I think, to see more Contract for Difference models.

Capacity mechanism - the cap and floor mechanism - was also mentioned, as I think interestingly, was a return to PFI/PPP-type models, in a very qualified, muted sense. We get the sense that it'll only really be relevant where there's revenue support, or natural revenue models for projects coming from, say, toll roads for example, rather than perhaps social infrastructure, where the only revenue will be a local authority contract.

The example project that was referred to in the paper was Euston Station. We also saw the Lower Thames Crossing referred to as a potential target for the regulated asset-based model.

The final part of the plan was establishment of NISTA, the National Infrastructure & Service Transformation Authority - a combined group of existing government entities pointed to as part of the Labour Manifesto. Interestingly, they've published the National Infrastructure Pipeline for the UK, as well as publishing the intention to release a digital model of infrastructure requirements that can be used by developers to look at where infrastructure is going to be best served across the UK.

All in all, I think it was a series of significant commitments made by the government, many of which, to be fair, had been announced previously, but this document certainly brought it all together and points a really positive direction of travel in terms of the scale of infrastructure deployment in the UK over the next 10 years to meet those government growth ambitions.

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