Modern Industrial Strategy turns one, but how much progress has been made?

One year into the delivery of the UK’s Modern Industrial Strategy, BCIS chief economist Dr David Crosthwaite digs into what has been achieved so far and how forward-looking plans could shape construction in the months ahead.

Twelve months into delivering its Industrial Strategy, the government has, to its credit, made tangible progress in laying the foundations for growth. With direction largely set, the challenge is now delivery.

To date, the government has made a number of significant investment commitments under its Industrial Strategy. In March 2026, it doubled funding for the Oxford-Cambridge Growth Corridor, making up to £800 million available for buying new land and building infrastructure to kickstart development.

It has also confirmed a funding envelope of up to £45 billion for Northern Powerhouse Rail, supporting new rail lines, stations and upgrades to strengthen connectivity across the North. Meanwhile, Wylfa in Anglesey will host the UK’s first small modular reactors, backed by £2.5 billion of investment, and is expected to create around 3,000 local jobs.

While these announcements are welcome, experience suggests that major investment commitments do not always translate into successful delivery. Their impact will ultimately depend on how effectively projects are managed in practice.

Planning reform has been another important area of progress. Under the Planning and Infrastructure Act 2025, the government has introduced the Nature Restoration Fund to balance development with conservation funding, created new powers to accelerate grid connections, modernised planning committees to prioritise the most significant developments and reduced opportunities for judicial review on nationally significant infrastructure projects (NSIPs).

More recently, it has launched consultation on extending judicial review reforms to major housing, transport and energy developments beyond NSIPs and proposed removing mandatory pre-application consultation requirements, potentially reducing planning timescales by up to 12 months. Efforts to reform Building Safety Regulator operations and overhaul nuclear planning and regulation to accelerate infrastructure building are part and parcel of this.

None of these measures will, on their own, unlock construction activity overnight. However, they represent important steps towards creating a planning system that is more predictable and attractive to long-term investors.

The UK’s regulatory environment continues to be identified by infrastructure investors as a barrier to investment, according to the latest Global Infrastructure Investor Association pulse survey. Continued reform will therefore be essential if the government is to improve the pace of delivery and investor confidence over time.

Alongside planning reform, the government has also begun strengthening the conditions needed to support future investment in place-making. Thirteen local growth plans have now been published, while the Strategic Sites Accelerator is expected to begin operating in the coming months. Together, these initiatives could help create a stronger pipeline of development opportunities, although many remain at an early stage and their effect on construction activity is likely to take time to emerge.

The government’s focus on skills has been another important element of the Industrial Strategy. Efforts to address shortages in construction and engineering include establishing technical excellence colleges, expanding construction-focused training and committing to publish sector job plans later this year in partnership with industry, trade unions and local leaders.

These measures represent real progress compared with two years ago and suggest a more coordinated approach to developing the construction workforce and the wider skills base needed to support the sector. However, they also highlight wider questions about how construction attracts, develops and retains its workforce over the longer term.

If there is little immediate incentive to recruit because demand remains subdued, cash-constrained employers are unlikely to take on additional staff. Alongside measures to expand the workforce, the government also needs to create the conditions that encourage recruitment by supporting construction demand and maintaining competitive employment costs.

Commercial conditions across the supply chain will also play an important role. Proposed reforms to payment practices and public procurement could improve cash flow for smaller firms and widen access to public contracts. If implemented effectively, these changes may strengthen the industry’s capacity to invest in people, equipment and productivity.

Energy policy represents another defining test of the Industrial Strategy. Improving grid connections and reducing industrial energy costs could significantly enhance UK competitiveness, but delivery remains some way off. The British Industrial Competitiveness Scheme will not be introduced until 2027, prompting calls from organisations such as Make UK⁽¹⁾ to bring it forward and widen eligibility across manufacturing.

Given the UK’s continued exposure to volatile wholesale energy markets, accelerating this support would likely strengthen domestic manufacturers, improve supply chain resilience and reduce friction across construction project pipelines.

The strategy’s first year has been characterised by substantial policy development. It has set a clearer direction for planning reform, infrastructure investment and skills in particular.

However, there is still a considerable amount of work to be done. The economic environment is now less predictable than when the Industrial Strategy was first published, with energy market volatility placing greater pressure on construction costs.

Even without these additional challenges, major construction and infrastructure schemes are inherently difficult to deliver. For example, the Public Accounts Committee recently highlighted the risk that the Department for Transport may not be able to deliver Northern Powerhouse Rail within its £45 billion funding envelope. It also noted that it remains unclear how the scheme will deliver its intended benefits for the North⁽²⁾.

To this end, new government leadership arrives as an opportunity to ensure the business and regulatory environments are capable of supporting the scale of construction activity needed to deliver growth through the Industrial Strategy. Without sustained progress in these areas, many of the policy reforms and funding commitments announced over the past year could struggle to achieve their intended impact.

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^{(1) MAKE UK – Manufacturers and unions call for urgent Government action - here}

^{(2) UK Parliament – Northern Powerhouse Rail – here}