A new report has revealed that the UK needs to raise annual infrastructure spending by 54%, from £47bn ($62bn) in 2024 to £73bn ($96bn) each year through 2034, to achieve government ambitions set out in the ten-year public infrastructure strategy.
The McKinsey & Company report highlights that increasing investment levels alone will not be sufficient, as only 59% of planned infrastructure spending was delivered between 2015 and 2024, resulting in a cumulative shortfall of £163bn ($217bn).
McKinsey warns that if this delivery rate continues, up to £250bn ($333bn) worth of infrastructure projects could remain incomplete over the next decade.
The analysis comes as the UK government affirms commitments including a ten-year infrastructure pipeline valued at £718bn ($955bn) as of March 2026, an increase in defence spending to 2.5% of GDP by 2027, £57bn ($76bn) in capital investment for health and social care between 2026 and 2030, and up to £50bn ($67bn) for energy and net zero initiatives during the same period.
Financing deals for UK infrastructure reached a peak in 2025.
McKinsey’s report identifies four immediate changes that could improve infrastructure delivery: stabilising the project pipeline with longer-term planning and gated approvals; introducing data-driven management practices for consistent performance tracking; utilising tools such as digital twins and AI-enabled planning; and maintaining continuity in project leadership to retain expertise.
Globally, McKinsey estimates that $106tn in infrastructure investment will be required by 2040 to keep pace with demand for roads, energy grids, housing, telecommunications networks and electric vehicle charging points.
In July 2025, figures released by the Department for Business and Trade showed that foreign direct investment (FDI) project numbers in the UK declined by 12% year-on-year to reach a record low of 1,375 between 2024 and 2025. In contrast, venture capital investment value increased sharply to £4.35bn during the same period.
UNCTAD’s World Investment Report attributed global FDI decreases, excluding European conduit economies, to factors such as geopolitical tensions, industrial policy shifts, high borrowing costs and exchange rate volatility.
