After Brexit, The Treasury of UK has launched a consultation on possible new models to finance private infrastructure that could lead to the creation of a new investment bank. But they ruled out a like for like replacement for the Private Finance Initiative. The review meeting sought contributions on the effectiveness of the government’s use of investment models and existing tools to support private investment and considers the possible creation of a national, operationally independent, infrastructure finance institution.

The consultation seeks views on whether the UK should develop its own infrastructure finance institution after Brexit. The consultation document states that they will consider the infrastructure finance market, analyze future challenges, and look at the future role of the government in ensuring that viable projects can raise the private investment they need. It also states that they will not be seeking a like-for-like replacement for PFI and PF2 instead, open to exploring new ways to use private finance in government projects, but the benefits brought by private finance must outweigh the additional cost to the taxpayer of using private capital, and the government will not consider proposals demonstrating the same characteristics as PFI or PF2.

Now the consultation is also looking for views on the effectiveness of existing government tools to support the supply of infrastructure finance, and whether they could be used in other sectors. These tools include the UK Guarantees Scheme, which underwrites nationally significant infrastructure projects being developed by private firms, a regulated asset base in water and energy networks, and Contracts for Difference auctions in renewable energy.