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Hundreds of Private Finance Initiative agreements are due to come to an end in the next couple of years, as deals signed in the 1990s and early 2000s expire. In this article Peter Dunn, director at AtkinsRéalis and Joe Robinson director at Equitix, discuss the role of private finance in ensuring our vital community facilities are preserved for future generations.
As the UK prepares for the expiry of a significant number of Private Finance Initiative (PFI) contracts from 2027 onwards, the future maintenance of the country’s social infrastructure requires careful consideration.
These assets, including hospitals, schools, and community facilities, continue to play a central role in public service delivery and are well maintained. However, managing the future of social infrastructure assets built decades ago could represent a significant additional cost to Government at a time when public finances are stretched.
Rather than viewing the end of PFI and other PPP contracts as a problem to be solved, it can instead be a catalyst for innovation, policy, and delivery; this presents an opportunity to drive investment and reassess how we manage, fund, and value social infrastructure.
Re-evaluating social infrastructure
The expiry of PFI contracts raises important questions over what the public sector needs from its social infrastructure assets to meet future operational challenges and opportunities. These include improvements in energy efficiency, accessibility, and digital capability.
Until now there has been no consistent government policy to address the asset transition, or clear mechanism for handing back these assets into a new era of public service delivery. The result is a growing investment commitment that risks diverting resources from frontline services and undermining the UK’s broader infrastructure ambitions.
But we are encouraged by the Government’s announcement in the November Budget that it will consider private sources of finance, including Public Private Partnerships, to decarbonise the public sector estate, which should enable some real progress to be made in this area.
Aligning investment with public need
A proactive approach is needed to balance the need for financial responsibility with the imperative to maintain and improve essential infrastructure for the benefit of the communities it serves - one that provides a viable alternative to rebuilding from scratch.
One solution is to tap into long-term capital. Pension funds are front of mind for funding new programmes, with new regulation being considered to incentivise UK-based funds into UK infrastructure. But they could also play a meaningful role in supporting the refurbishment, renewal and new construction of social infrastructure assets.
A place-based investment model where capital is directed toward local infrastructure projects offers a way to align financial returns with community benefit. This approach helps deliver stable outcomes for investors while improving public services and supporting local development.
One example of how private capital can be deployed responsibly is a £200 million transformation project that has been delivered through a long-term partnership between Equitix, Equans, and the University of Birmingham with a focus on long-term stewardship, sustainability and local engagement.
Pritchatts Park, a student accommodation village in Birmingham, featuring low-carbon student homes and a revitalized social hub, was created to meet the evolving needs of students and the wider community. The investment has enabled a place-based focus on the development, ensuring a positive impact for the long term.
A further consideration is how social infrastructure is valued. Traditional asset valuation methods often focus narrowly on financial metrics, overlooking the broader social and environmental contributions these assets make. This can limit the attractiveness of refurbishment projects to investors.
There is growing recognition of the need for a more holistic valuation framework that incorporates social value, environmental impact, and long-term community outcomes. Such a shift could unlock new sources of capital and ensure that investment decisions reflect the full spectrum of public benefit.
But it’s not just investment that will ensure the effective maintenance of this vital community infrastructure. A robust roadmap for asset management is also needed that considers broader targets and goals such as the need to decarbonise buildings and assets to comply with carbon legislation and future standards, and prioritises investment and projects accordingly.
The application of digital tools has a role to play here as can be seen with the Social Infrastructure Decarbonisation review by Equitix. This study, conducted in line with the Carbon Risk Real Estate Monitor (CRREM), translates the ambition of limiting global warming to 1.5 degrees Celsius into regional and property-type-specific decarbonisation pathways.
A baseline review of 51 buildings was conducted to assess the portfolio’s energy consumption, current cost of utility bills and produced carbon emissions. A roadmap dashboard was then built presenting bespoke carbon reduction interventions identified as being most suitable to each building, including the estimated installation costs, respective payback periods, and the foreseen carbon and cost savings as a result.
Building a collaborative response
Addressing the future of social infrastructure will require collaboration across sectors. Policymakers, investors, engineers, and community leaders all have a role to play in shaping a strategy that is inclusive, sustainable, and resilient.
This includes establishing clear policy guidance and funding mechanisms to support retrofit and renewal and developing vehicles that enable investors to fund refurbishment and new construction programmes.
We must create valuation models that reflect the true value of social infrastructure and encourage dialogue between public and private stakeholders to share best practice and align objectives.
While the UK’s social infrastructure presents some challenges, it’s clear there are significant opportunities as well. By taking a measured, strategic approach, we can ensure that these assets continue to serve communities well into the future.
The decisions made today will shape the quality and resilience of public services for generations to come. Now is the time to engage in thoughtful dialogue, identify the best models for investment and delivery, and commit to a shared vision for the future of social infrastructure.
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