Share this post:
Britain’s public finances are in a dire state — and the headlines this week confirm it.
In June alone, the UK government borrowed £20.7 billion, a staggering £6.6 billion more than last year, and far beyond what economists had forecast.
It’s the second-highest June borrowing figure since records began in 1993 — behind only the pandemic-ravaged 2020.
As Chancellor Rachel Reeves prepares for a bruising autumn budget, talk of tax hikes is intensifying.
Yet buried beneath the usual finger-pointing about welfare reversals, frozen thresholds, and economic headwinds lies a deeper, more structural problem — one that’s been quietly bleeding the public purse for years.
Britain has a megaproject addiction – and it’s costing us dearly.
Spiralling costs, spiralling debt
The latest example is Sizewell C, a new nuclear plant in Suffolk now confirmed to cost £38 billion — almost double its original estimate.
The numbers leapt upward overnight, with managing director Julia Pyke casually admitting that early forecasts failed to account for “inflation or risk.”
The public, as always, is expected to pick up the tab. An extra £1 a month on every household’s energy bill, for at least a decade.
This isn’t an isolated failure — it’s a pattern.
-
HS2, once billed at £33 billion, exploded past £100 billion before vast chunks were scrapped.
-
Hinkley Point C is now £46 billion, not the £18 billion originally promised — and still years from completion.
-
Crossrail ran £4 billion over budget and opened late.
-
Even the 2012 Olympics quadrupled in cost — from £2.4 billion to almost £9 billion.
And it’s not just concrete. The NHS IT system that was meant to revolutionise digital healthcare? That burned £10 billion before being binned entirely.
Over and over, we see the same pattern: big promises, lowball estimates, slick PR… and spiralling costs once the headlines fade.
Why this matters now
Reeves’s current crisis is often framed as short-term: a welfare U-turn here, a dip in tax receipts there.
But these spiralling megaprojects are locking in long-term liabilities that weigh down every future budget.
Interest payments on government debt hit £16.4 billion in June — nearly double last year’s figure.
Much of this comes from index-linked gilts, tied to inflation, which balloon when the cost of major capital projects overruns.
So even as Reeves insists she’s sticking to “tough fiscal rules” — no borrowing for day-to-day spending, and debt falling as a share of GDP — these massive backloaded costs quietly chip away at her room to manoeuvre.
Add a sluggish economy, rising unemployment, and growing pressure to invest in defence, health and housing — and it’s no wonder analysts expect Reeves to raise £15–30 billion in new taxes just to stay afloat.
But here’s the truth: she’s being pushed into this corner not just by political choices — but by a broken model of infrastructure delivery.
A system built to fail
How do these projects get so expensive?
Because the system is designed to hide the truth until it’s too late.
-
“Cost-plus” contracts guarantee profits for contractors even when they overshoot budgets.
-
Initial price tags are deliberately lowballed to win public and parliamentary support.
-
Risk assessments are sanitized to make politically convenient projections.
-
No binding penalties exist for cost overruns — just more taxpayer cash.
Once a project is locked in, ministers simply shrug and sign the cheques.
After all, they don’t pay the price. You do.
The National Audit Office (NAO) has been warning about this for years.
It makes little difference.
There is no proper independent oversight, and the incentives for transparency are non-existent.
Consultants profit.
Investors profit.
Politicians escape scrutiny.
The public pays.
Borrowing to stand still
This flawed system has a cascading effect.
-
To pay for spiralling capital costs, governments borrow.
-
To reassure markets, they cut services elsewhere: council budgets, school funding, NHS pay.
-
To raise quick cash, they privatise assets — often at a loss.
-
Meanwhile, basic national renewal (decarbonisation, affordable housing, public transport) is held hostage to the debts of past follies.
It’s no wonder public sector net debt is now 96.3 per cent of GDP — among the highest levels since the 1960s.
Britain is borrowing more not just because of global pressures or policy reversals.
It’s because we build badly, expensively, and dishonestly.
How it could be different
Other countries have figured this out.
-
Norway uses its sovereign wealth fund to invest cautiously in infrastructure, with long-term return requirements and strict controls.
-
Japan’s bullet trains — the most complex rail systems on Earth — are built on time and on budget because they’re run by engineers, not politicians.
-
Germany has largely avoided these megaproject pitfalls by focusing on decentralised renewable infrastructure, rather than centralised white elephants.
The UK could do the same — if we wanted to.
We need:
-
Transparent, independently audited forecasts.
-
Legal penalties for overruns.
-
Real accountability for ministers and departments.
-
A shift from headline-grabbing “monuments” to scalable, rational investments that serve the public good.
And most of all, we need to stop pretending that public-private partnerships magically transfer risk.
They don’t.
They privatise profit and socialise failure.
More than a budget problem
Chancellor Reeves may be forced to raise taxes in the autumn.
But the real story is deeper than any single budget cycle.
Britain isn’t just short of money — it’s short of honesty about how that money is spent.
Until we stop treating infrastructure as a political magic trick — announce low, spend high — we will keep spiralling into debt, dragging future generations with us.
Sizewell C isn’t just a nuclear plant.
It’s a warning sign – a red flag about a governance system that rewards failure, punishes truth-telling, and always—always—sends the bill to the public.
If Reeves wants to fix the books, she should start by fixing how Britain builds.
Share this post:
Britain’s borrowing crisis: are megaprojects like Sizewell C the hidden drain?
Share this post:
Britain’s public finances are in a dire state — and the headlines this week confirm it.
In June alone, the UK government borrowed £20.7 billion, a staggering £6.6 billion more than last year, and far beyond what economists had forecast.
It’s the second-highest June borrowing figure since records began in 1993 — behind only the pandemic-ravaged 2020.
As Chancellor Rachel Reeves prepares for a bruising autumn budget, talk of tax hikes is intensifying.
Yet buried beneath the usual finger-pointing about welfare reversals, frozen thresholds, and economic headwinds lies a deeper, more structural problem — one that’s been quietly bleeding the public purse for years.
Britain has a megaproject addiction – and it’s costing us dearly.
Spiralling costs, spiralling debt
The latest example is Sizewell C, a new nuclear plant in Suffolk now confirmed to cost £38 billion — almost double its original estimate.
The numbers leapt upward overnight, with managing director Julia Pyke casually admitting that early forecasts failed to account for “inflation or risk.”
The public, as always, is expected to pick up the tab. An extra £1 a month on every household’s energy bill, for at least a decade.
This isn’t an isolated failure — it’s a pattern.
HS2, once billed at £33 billion, exploded past £100 billion before vast chunks were scrapped.
Hinkley Point C is now £46 billion, not the £18 billion originally promised — and still years from completion.
Crossrail ran £4 billion over budget and opened late.
Even the 2012 Olympics quadrupled in cost — from £2.4 billion to almost £9 billion.
And it’s not just concrete. The NHS IT system that was meant to revolutionise digital healthcare? That burned £10 billion before being binned entirely.
Over and over, we see the same pattern: big promises, lowball estimates, slick PR… and spiralling costs once the headlines fade.
Why this matters now
Reeves’s current crisis is often framed as short-term: a welfare U-turn here, a dip in tax receipts there.
But these spiralling megaprojects are locking in long-term liabilities that weigh down every future budget.
Interest payments on government debt hit £16.4 billion in June — nearly double last year’s figure.
Much of this comes from index-linked gilts, tied to inflation, which balloon when the cost of major capital projects overruns.
So even as Reeves insists she’s sticking to “tough fiscal rules” — no borrowing for day-to-day spending, and debt falling as a share of GDP — these massive backloaded costs quietly chip away at her room to manoeuvre.
Add a sluggish economy, rising unemployment, and growing pressure to invest in defence, health and housing — and it’s no wonder analysts expect Reeves to raise £15–30 billion in new taxes just to stay afloat.
But here’s the truth: she’s being pushed into this corner not just by political choices — but by a broken model of infrastructure delivery.
A system built to fail
How do these projects get so expensive?
Because the system is designed to hide the truth until it’s too late.
“Cost-plus” contracts guarantee profits for contractors even when they overshoot budgets.
Initial price tags are deliberately lowballed to win public and parliamentary support.
Risk assessments are sanitized to make politically convenient projections.
No binding penalties exist for cost overruns — just more taxpayer cash.
Once a project is locked in, ministers simply shrug and sign the cheques.
After all, they don’t pay the price. You do.
The National Audit Office (NAO) has been warning about this for years.
It makes little difference.
There is no proper independent oversight, and the incentives for transparency are non-existent.
Consultants profit.
Investors profit.
Politicians escape scrutiny.
The public pays.
Borrowing to stand still
This flawed system has a cascading effect.
To pay for spiralling capital costs, governments borrow.
To reassure markets, they cut services elsewhere: council budgets, school funding, NHS pay.
To raise quick cash, they privatise assets — often at a loss.
Meanwhile, basic national renewal (decarbonisation, affordable housing, public transport) is held hostage to the debts of past follies.
It’s no wonder public sector net debt is now 96.3 per cent of GDP — among the highest levels since the 1960s.
Britain is borrowing more not just because of global pressures or policy reversals.
It’s because we build badly, expensively, and dishonestly.
How it could be different
Other countries have figured this out.
Norway uses its sovereign wealth fund to invest cautiously in infrastructure, with long-term return requirements and strict controls.
Japan’s bullet trains — the most complex rail systems on Earth — are built on time and on budget because they’re run by engineers, not politicians.
Germany has largely avoided these megaproject pitfalls by focusing on decentralised renewable infrastructure, rather than centralised white elephants.
The UK could do the same — if we wanted to.
We need:
Transparent, independently audited forecasts.
Legal penalties for overruns.
Real accountability for ministers and departments.
A shift from headline-grabbing “monuments” to scalable, rational investments that serve the public good.
And most of all, we need to stop pretending that public-private partnerships magically transfer risk.
They don’t.
They privatise profit and socialise failure.
More than a budget problem
Chancellor Reeves may be forced to raise taxes in the autumn.
But the real story is deeper than any single budget cycle.
Britain isn’t just short of money — it’s short of honesty about how that money is spent.
Until we stop treating infrastructure as a political magic trick — announce low, spend high — we will keep spiralling into debt, dragging future generations with us.
Sizewell C isn’t just a nuclear plant.
It’s a warning sign – a red flag about a governance system that rewards failure, punishes truth-telling, and always—always—sends the bill to the public.
If Reeves wants to fix the books, she should start by fixing how Britain builds.
Share this post:
you might also like
How much can YOU pay? A&E charges would speed NHS privatisation
Osborne wants a ‘year of hard truths’. Here’s one: He’s HIDING the truth
Sink, Britain, Sink! – the cost of privatising water management