The Government’s new 10-Year Infrastructure Strategy sets out national priorities and spending commitments through 2034, including £725 billion in planned investment and inflation-linked capital spending increases from 2029. But as John Phillipou, Managing Director of SME Lending at Paragon, argues, unlocking its full potential for SMEs will require credible delivery, procurement reform, and strategic coordination across sectors.
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.
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