The £725bn Infrastructure Strategy can't succeed without SME delivery
The Government's newly unveiled £725 billion 10-Year Infrastructure Strategy has the potential to reshape the country's economic landscape – and could unlock significant opportunities for small and medium-sized enterprises (SMEs) across several key sectors.
But potential is the operative word. While the ambition is welcome, the UK has seen bold infrastructure promises before, many of which have struggled to materialise at scale or pace. Projects like HS2, which has seen costs spiral and key northern sections scrapped, and the abandoned Garden Bridge, which consumed over £50 million without ever being built, serve as reminders that delivery is just as important as aspiration.
At Paragon Bank, we keep a regular dialogue with our customers across manufacturing, construction and other vital industries. Across the board, they consistently tell us that infrastructure and housing are key drivers for capital investment. A long-term strategy like this, if implemented effectively, can provide the visibility and confidence businesses need to plan ahead, invest in equipment and grow their workforce.
The Government's pledge to invest at least £9 billion annually from 2025, rising to over £10 billion by 2034, could stimulate demand across supply chains. For construction SMEs, this may translate into a steady pipeline of public sector projects—from school refurbishments to hospital upgrades. The shift toward preventative maintenance over reactive repairs is also a positive step, potentially enabling longer-term contracts and more sustainable business planning.
In housing, the ambition to build over 500,000 new homes with £16 billion in public investment - leveraging a further £53 billion in private capital – could also be transformative. But delivery will depend on how effectively local authorities and developers can mobilise. SME developers that specialise in energy-efficient, modern housing could be well-positioned, provided they are given fair access to contracts and planning processes.
What's more, the recent launch of the Government's new industrial strategy – the first in nearly a decade - adds further weight to this long-term vision. With a focus on eight high-growth sectors, including advanced manufacturing, clean energy and digital technologies, the strategy aims to double business investment in key areas and build regional clusters across the UK. For SMEs, this could mean new opportunities in industries like aerospace and agricultural technologies, provided the right support systems are put in place.
The Government's commitment to reducing electricity costs for energy-intensive industries and streamlining grid access is particularly welcomed by manufacturers, many of which face significant operating costs and delays in scaling. These interventions, if delivered effectively, promise to help level the playing field and enable smaller firms to compete in global markets.
Encouragingly, the British Business Bank's latest £6.6 billion commitment to back innovation and support the industrial strategy adds another layer of support. This funding could help SMEs invest in the technologies, skills, and capabilities needed to deliver on both infrastructure and industrial ambitions. But coordination between these initiatives will be key. Too often, funding streams operate in silos, which limit impact.
To ensure SMEs are not left behind, Government must ensure deliberate action. Procurement reform is essential. Personally, I'd like to see contracts be broken into smaller, accessible groups, with simplified bidding processes and clear SME participation targets. The creation of the National Infrastructure and Service Transformation Authority (NISTA) is a step in the right direction, but it must ensure transparency and accountability.
Local authorities and delivery bodies also need the resources and autonomy to engage regional SMEs meaningfully. That includes early visibility of projects, technical support for tendering, and prompt payment practices.
At Paragon, we're ready to support this next chapter. We're investing in tech to ensure faster and more seamless approvals – reducing approval times by more than 60 percent in the last year alone - expanding our lending to sectors aligned with the strategies and developing tailored products to help SMEs grow and scale sustainably and seize opportunities that do arise.
This strategy could mark the beginning of a new chapter for UK infrastructure, and for the SMEs that power our economy. If Government can deliver, SMEs – and Paragon – will be ready to do the same.
"The £725bn Infrastructure Strategy can't succeed without SME delivery" was originally created and published by Leasing Life, a GlobalData owned brand.
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