Is 2026 shaping up to be infrastructure’s year?

With Budget mania settling down slightly, BCIS data services director, Karl Horton, considers whether improving investor sentiment and an update to the Infrastructure Pipeline in the new year will support progress in the infrastructure sector.

Is 2026 shaping up to be infrastructure’s year?

If you’ve soaked up the details of last week’s Budget, you’ll know the government stood by the investment commitments made in its Spending Review and infrastructure strategy.

An update to the Infrastructure Pipeline is next on the cards and with investor sentiment toward the UK warming up, there’s a chance 2026 could be a turning point for infrastructure progress.

Already, this is quite an optimistic suggestion given the Budget’s wider impact on supply chains.

Tinkering with the lowest wage brackets almost always catalyses a chain reaction where employers must cough up more for workers on higher earnings too.

It’s almost inevitable that next year’s employment cost hikes will disincentivise recruitment and training and in turn compound labour bottlenecks and project delays.

The fallout of this is likely to be slower growth, the quarterly measure of which the Office for Budget Responsibility (OBR) estimates will only pick up gradually in the near term under the shadow of geopolitical uncertainty and the weight of tax rises on business and consumer confidence⁽¹⁾. Real GDP growth estimates for 2026 through to 2030 have all been downgraded.

That said, things on the infrastructure front aren’t entirely downbeat.

The Budget brought important updates, even if it failed to cut cost pressures for the suppliers delivering infrastructure works.

£891 million of additional public sector capital for the Lower Thames Crossing scheme will hopefully lower the risks for and up its attraction to private investors.

Continued state support for other transport schemes, including the extension to the Docklands Light Railway, Heathrow Airport’s third runway and the Transpennine Route Upgrade, were further green ticks.

As was adding nuclear energy to the Green Financing Framework (which should unlock cheaper capital and broaden the investor pool) and the confirmed implementation plan to overhaul the UK’s costly nuclear regulatory regime.

This is due to be delivered within three months and directly responds to recommendations made in a new report from the Nuclear Regulatory Taskforce.

According to the report, the UK’s status as the most expensive place to build nuclear projects is rooted in five failures – fragmented regulatory oversight, costly decision-making, process-focused legislation, government indecision and weak incentives⁽²⁾.

Nuclear’s viability will depend on how well the implementation plan addresses these pitfalls. The official Budget document suggests implementation will take around two years.

Getting it wrong could be curtains for the government’s nuclear spending plans and seriously undermine progress on the green transition and growth, so it’s promising to see the government getting the ball rolling.

Most would agree such announcements didn’t make the Budget a resounding success, but it’s possible they could help to keep investor interest ticking over into next year.

We know from the latest infrastructure pulse survey from the Global Infrastructure Investor Association (GIIA) that investor sentiment in UK infrastructure improved in 4Q2025.

The survey asked respondents to rate 12 countries or regions in North America and Europe based on how appealing they were as investment environments.

The UK earned a score just above 1, the highest rating it’s received since 2Q2023, putting it ahead of France, Italy and Mexico in the final quarter of 2025.

According to the survey commentary, the UK largely has developments in government policy, including confirmed reforms in the water and power sectors, to thank for this.

An unpredictable and complex regulatory regime has been one of the biggest thorns in the side of UK infrastructure, leading to a national reputation for stop/start progress, cost overruns and investor risk exposure.

GIIA insights show it’s consistently been the number one barrier to investment in UK infrastructure, as ranked by investors, since 2Q2022. The exceptions were political instability and sentiment in 4Q2022 and unsurprisingly, a lack of project pipeline visibility in 4Q2025.

The promised resets on both water and nuclear sector regulation made in 2025 represent a positive shift away from this narrative and, combined with the Planning and Infrastructure Bill, signal a healthier reshaping of the UK’s regulatory environment.

The proof will be in the eating but at the very least, the commitment to regulatory change itself seems to be instilling more confidence.

So where does this leave infrastructure for 2026?

Much of the change the government is pushing through now will likely take a while to bed in – the recruitment of 350 extra planners for one is no quick fix.

We’re also still waiting for a clear plan of attack on private finance.

Budget clues were sparse, but we now know a new public-private partnerships (PPPs) model, along with public sector investment, will fund new and upgraded neighbourhood health centres.

This model is currently under development and, with some luck, will be demystified in spring along with a more complete private finance strategy.

Who knows, 2026 could be a big year for infrastructure yet.

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^{(1) EFOs- Economic and fiscal outlook – November 2025  – here}

^{(2) GOV.UK – Nuclear Regulatory Review 2025 – here}