From Hinkley Point C to a Broken Model: Why the UK Can’t Build Big Anymore
Many people can feel that the UK economy is speeding downhill, not gently slowing. For a supposedly advanced, rich country, why is the government so short of money, and why do major projects struggle to get built at all? Hinkley Point C (HPC), the new nuclear power station in Somerset, is an almost perfect case study of what has gone wrong.
From nuclear pioneer to empty toolbox
The story starts well. Britain was once a nuclear pioneer: early breakthroughs in nuclear physics, one of the first atomic bombs, the world’s first commercial nuclear power station, and a sizeable fleet of reactors. At one point, nuclear provided over a quarter of the country’s electricity, supported by a full industrial chain from enrichment to fuel reprocessing.
Then came the fiscal squeeze of the 1970s and 1980s. Faced with oil shocks, deindustrialisation and the costs of running down empire, the UK state wanted to shrink its balance sheet. Nuclear, with huge upfront costs and slow payback, became an easy target. The Thatcher-era solution was to privatise: bundle the best-performing nuclear assets into British Energy and sell them off to the market.
On paper, this relieved the state. In practice, it hollowed out capacity. A private operator under pressure to maximise returns cut the most “expendable” spending: long-term R&D, skills pipelines, and heavy maintenance. Over two decades, the number of nuclear engineers collapsed, labs and specialist firms closed, and the UK quietly lost the ability to design and deliver complex nuclear projects by itself. British Energy itself eventually slid toward bankruptcy, precisely because ageing assets needed heavy investment which the balance sheet could not support.
Relying on foreign partners in a high-risk system
By the late 2000s, climate commitments and the decision to phase out coal forced the UK back toward nuclear. But when the government decided in 2008 to pursue a new generation of reactors, it discovered that the domestic toolbox was empty: few engineers, little recent project experience, and a weakened industrial base. The only realistic option was to rely on foreign partners.
Enter EDF from France, and later China General Nuclear (CGN). EDF bought British Energy and agreed to build a new plant at Hinkley Point. The initial vision looked bold but straightforward: around £16 billion in costs, first power by 2017, and a long-term contract guaranteeing a relatively high electricity price to make the numbers work.
Once this plan hit the UK’s real governance environment, the problems multiplied. The project had to navigate layer upon layer of approvals: extensive public consultations, environmental assessments, licensing and parliamentary scrutiny. Fukushima in 2011 added further delays as safety cases were revisited. Then Brussels raised competition concerns about the generous price guarantee, triggering EU-level investigations into state aid. Each step took years, not months.
At the same time, politics and geopolitics shifted. The “golden era” of UK–China relations under David Cameron, in which CGN was welcomed as co-investor, gave way to anxiety about Chinese involvement in critical infrastructure. Brexit raised fresh questions about the UK’s economic model, its relationship with Europe, and its bargaining power with investors. Each political turn justified more reviews, more conditions, more renegotiation.
Visible problems, deeper root causes
On the surface, the problems seem obvious: gigantic cost overruns, endless delays, investors dropping out, and a final bill that dwarfs original estimates. But these are symptoms, not root causes.
Underneath, three deeper issues stand out:
Strategic sectors were treated as ordinary commercial assets
For decades, British policy treated nuclear power and other big infrastructure as things the market could handle if the state simply got out of the way. The priority was to minimise public spending and public debt in the short term. That mindset justified privatising nuclear assets and cutting long-term investment in skills, R&D and public engineering capacity. It looked smart on the Treasury’s spreadsheet for a few years. It quietly destroyed the very capabilities needed to build the next generation of projects.
A fragmented, risk-averse decision system with no clear “owner”
Major projects in the UK must navigate a maze of actors—departments, regulators, courts, local authorities, international organisations and activist groups. Each has some power to delay or veto. Very few have the power or incentive to take responsibility for delivery. In such a system, the safest move for each actor is to avoid blame: demand more data, launch another consultation, insist on another review. Over time, the real bottleneck becomes decision-making itself.
High geopolitical uncertainty layered on top of weak capacity
Because the UK hollowed out its own capabilities, it became dependent on foreign companies and capital for delivery. But in a world of rising geopolitical tension, foreign partners come with political baggage. Chinese involvement became a security concern. EU oversight of state aid clashed with domestic industrial goals. US pressure to “de-risk” from China forced mid-course changes of plan. When your entire model depends on external partners, and your politics keeps shifting, investors will naturally demand a higher price—or walk away.
Put together, these create a vicious circle. The state lacks capacity, so it outsources. Outsourcing raises political and security concerns, so more oversight and conditions are added. The extra complexity slows projects and raises costs, scaring investors. The state then has to step back in, paying even more to rescue or complete projects it once wanted to keep off its balance sheet.
The hidden conflict at the heart of UK infrastructure
At the core is a simple but powerful conflict.
On one side, there is a strong desire to keep public borrowing and visible state intervention to a minimum. That leads to policies of privatisation, reliance on foreign investors, and treating big projects as commercial contracts with elaborate risk transfers.
On the other side, there is the reality that some infrastructures—especially nuclear power—are strategic. They require stable, long-term commitments, control over technology and security risks, and deep technical competence. They are not easily reduced to a neat private business case.
Trying to satisfy both sides simultaneously has produced the worst of both worlds:
The state is too weak, in-house, to design and drive projects effectively.
Yet it is still ultimately responsible when things go wrong, and ends up paying anyway—only later, and at a much higher cost.
Where could solutions lie?
If the UK wants to escape this trap, it needs more than better contract drafting or a new watchdog. The direction of change has to match the underlying problems.
Recognise some sectors as strategic, not just commercial
Nuclear energy, core electricity networks, and certain transport links are closer to defence than to retail. They justify long-term public investment, even when short-term fiscal metrics look worse. The question should be: what capabilities and assets must stay under robust public influence for the next 30–50 years?
Rebuild state and domestic industrial capacity
That means investing seriously in engineering education, technical agencies and public project-delivery expertise. It also means nurturing domestic supply chains that can take on complex, long-term work. Without this, every project is a fresh attempt to buy capacity abroad—and to manage it through lawyers and regulators rather than engineers.
Streamline decision-making and clarify ownership of outcomes
For truly strategic projects, the UK needs decision structures where one entity is clearly responsible for delivery, with the authority to cut through overlapping approvals while still respecting legitimate safety and environmental standards. “Everyone can say no, nobody can say yes” is a recipe for paralysis.
Offer stability instead of maximum flexibility
Investors and partners can live with stricter rules and lower returns if those rules are stable and credible. What kills projects is not strictness but unpredictability: political u-turns, sudden security reclassifications, or years-long regulatory ambiguity. The UK will have to decide what kind of long-term offers it can stand behind across electoral cycles.
Hinkley Point C is not just an expensive exception. It is a mirror showing a deeper pattern: a state that has tried to shrink and outsource its way out of responsibility, in sectors where responsibility cannot actually be outsourced. Until that tension is faced directly, every new “flagship project” will be at risk of becoming the next cautionary tale.
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