18 July 2016


While the UK remains a member of the EU the law relating to infrastructure has not changed. If and when the UK actually leaves the EU (something which is at least 2 years away) parliament will have to decide which, if any, aspects of the law relating to infrastructure development and operation it wishes to change. Areas of focus will need to include public procurement regulations and the funding of public sector projects.

Economic Impact

Of much greater, and immediate, concern are the economic implications for infrastructure projects. There has already been significant speculation about which sectors will be affected most strongly. The privatised sectors may be most vulnerable in the short term but a downturn in the economy will also reduce the level of public funding available.

The fall in value of the pound is another issue – on the one hand, inward investment is better value but on the other, importing of goods and services is more expensive. Given the heavy reliance of the UK infrastructure market on major contractors from outside the UK, this may well create inflationary pressures and further uncertainty in the supply chain.

Mega projects that are well advanced such as Thames Tideway Tunnel and Crossrail are unlikely to be affected. Those further down the pipeline such as HS2 and Heathrow's third runway are more vulnerable to the less certain economic outlook and a hiatus while the new government gets to grips with the implications of Brexit and key departmental resources are reallocated to deal with EU exit negotiations. Initial indications are that in the medium to long term the need for infrastructure investment will be greater than ever (not least as an economic stimulus and to show the UK remains an attractive investment option) therefore the longer term impact could be neutral or even positive.

A related issue will be the availability of funding. The European Investment Bank (EIB) has recently been a major investor in UK infrastructure. On exit from the EU the UK will have to relinquish its status as shareholder in the EIB and take its chances as a non-member state recipient of funding. Only time will tell as to how this relationship will progress but there have already been some immediate casualties as a result of the uncertainty around EIB and European grant funding.


The biggest impact of Brexit on infrastructure is likely to be delay to investment decisions, with some projects ultimately being postponed indefinitely or scaled down significantly. The legal landscape in which projects do proceed will largely depend on the terms of the deal the new government is able to cut with the EU and individual member states going forward. There may also be early implications for the UK’s relationship with non-member states. There are some positive early signs in this area - the challenge will be making the most of these in the face of all the other challenges facing government.

Key contact

Philip Beer

Philip Beer Partner

  • Real Estate
  • Transport
  • Energy and Utilities

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