Spending on power and water is predicted to more than double, from a current £11bn to £27bn per year; spending on transportation will see similar increases, rising from £12bn to £23bn annually.
Richard Abadie, PwC’s global leader of capital projects and infrastructure (CP&I) said the spending would be critical to maintain the UK’s global edge.
Abadie said, “It is telling that social infrastructure spending accounts for about a third of total spending currently despite the perception of cutbacks in this area.
“Nevertheless, we expect transport and power to be the growth sectors up to 2025 with transport doubling and power generation nearly tripling. This spending will be critical to ensuring economic growth in the UK and global competitiveness."
UK spending on these projects will keep pace with other major European countries, rising by 3.9% each year. However, forecasts also predict that North America will perform better than western Europe, due in part to shallow growth in the aftermath of the financial crisis.
The UK government will also have to rely on increased private investment to fund these projects.
“Private investment, whether from pension funds, insurance companies, sovereign wealth funds for example, will be the dominant financing source for this spending as government has signaled previously,” Abadie said.