Invest in what people need

What do we mean by "what people need"?

Some things matter to everyone, whatever they earn. They fall into three broad groups.

Your invisible income

When people think about living standards, they usually think about pay. But what you can afford also depends on what you don't have to pay for.

A free GP appointment, a state school place or a cheap, reliable bus all leave more money in your pocket. This is sometimes called the social wage: the value of public services, counted as if it were part of your income. [1]

Official statistics treat services like the NHS and schools as "benefits in kind". For lower-income households, they make up a much bigger share of their living standards than for wealthier ones. [2]

Spending vs investment

Government money goes on two very different things.

The difference matters. Investment is a bit like a household taking out a mortgage: you borrow now for something that keeps paying back for years. That's why many economists argue it's reasonable to borrow for investment, but not for day-to-day costs. In 1997, the government adopted a "golden rule" built on exactly this idea. [3]

Where things stand

Problems with public investment in the UK usually fall into three groups.

What's already happening?

The government has made several major commitments since 2024, including:

• A 10-year infrastructure strategy, published in 2025, promising at least £725 billion of investment over the next decade. [8]
• £39 billion for social and affordable homes over ten years, alongside a target of 1.5 million new homes during this parliament. [8]
• A Warm Homes Plan to help insulate homes and install cleaner heating. [9]
• Railways returning to public ownership as private operators' contracts come to an end. [10]
• Changes to fiscal rules in 2024, giving more room to borrow for investment. [11]

Big promises don't always turn into finished projects, so what matters is whether this investment is delivered on time and on budget.

What could we invest in?

These are the areas that come up most often in the debate.

1. Social and affordable homes

   The idea

   Build many more homes for social rent, owned by councils or housing associations.

   Why it might help

   Lower rents leave families with more money to spend, and could reduce the billions spent on housing benefit paid to private landlords.

   The hard question

   Where should they be built, and how do you speed up planning while respecting local communities?

2. Local transport

   The idea

   Invest in frequent, affordable buses, trams and trains, especially outside London.

   Why it might help

   Good transport links people to jobs, cuts the cost of running a car, and helps towns that have been left behind.

   The hard question

   Many rural routes will never pay for themselves. Who covers the running costs year after year?

3. Warm, efficient homes

   The idea

   Insulate homes and support cleaner heating, alongside investment in homegrown clean energy.

   Why it might help

   UK homes are among the least energy-efficient in Europe, losing heat up to three times faster than homes on the continent. [12] Better insulation means lower bills, warmer homes and less exposure to energy price shocks.

   The hard question

   The upfront cost is high and the work can be disruptive. How much should the state pay, and how much should homeowners?

4. Fixing public buildings

   The idea

   Repair and rebuild hospitals, schools, courts and care facilities, and give staff modern equipment.

   Why it might help

   Staff can't work efficiently in leaking buildings with outdated equipment. Better facilities can mean shorter waits and better results.

   The hard question

   A new hospital also needs doctors and nurses. Will the day-to-day funding be there to run it?

Who should provide the essentials?

There are different ways to make sure people can get what they need, ranging from light-touch to hands-on.

1. Targeted help

   Leave services in private hands, but help people who struggle to pay, for example through benefits or cheaper "social tariffs" for broadband and energy.

2. Regulate private providers

   Private companies run the service, but a regulator controls prices and standards. The energy price cap, introduced in 2019, is an example. [13] Critics point to water, where the government itself has said regulation was too weak to stop financial mismanagement and record sewage pollution. [14]

3. Invest alongside the private sector

   Government shares the cost and risk of big projects with private investors, encouraging investment that might not happen otherwise.

4. Public ownership

   The state owns and runs the service directly, as is now happening with passenger railways. [10] Supporters say profits can be reinvested; critics worry about efficiency and political interference.

5. Universal basic services

   Extend the NHS idea to other essentials, making things like local transport, childcare or internet access free at the point of use for everyone. The idea was proposed by researchers at University College London in 2017 [1], but would be expensive to deliver in full.

How could it be paid for?

Investment has to be funded somehow. There are three main options, and most plans use a mix.

What are the challenges?

1. Rising debt

   The problem

   Borrowing to invest adds to national debt, and higher debt interest costs leave less money for everything else.

   A possible fix

   Borrow only for investments expected to pay back, and publish the expected benefits so they can be checked.

2. Cost overruns and delays

   The problem

   Big projects often cost far more and take far longer than promised. HS2's costs rose so much that its northern leg was cancelled in 2023. [16]

   A possible fix

   Realistic budgets from the start, independent scrutiny, and avoiding costly changes to plans once work begins.

3. Slow planning

   The problem

   Getting permission to build homes, power lines or railways can take years, adding cost and delay.

   A possible fix

   Simpler, faster planning rules, while still giving communities a say and protecting the environment.

4. Not enough skilled workers

   The problem

   There aren't enough builders, engineers and electricians to deliver everything at once.

   A possible fix

   Invest in training and apprenticeships alongside the projects themselves. Our Creating better jobs explainer looks at this in more detail.

5. Stop-start funding

   The problem

   Investment budgets are easy to cut when money is tight, leaving projects half-finished and repairs piling up.

   A possible fix

   Long-term funding commitments with cross-party support, and independent bodies to plan and track progress.

6. Forgetting the running costs

   The problem

   New buildings and services need staff and maintenance for decades after they open.

   A possible fix

   Plan and fund the day-to-day costs at the same time as the investment, not as an afterthought.

The arguments at a glance

Sources and further reading

These sources support the facts and examples on this page. They explain the evidence and the policy options, but they don't all endorse the ideas discussed here.

1. UCL Institute for Global Prosperity: Social prosperity for the future – a proposal for Universal Basic Services (2017) — the "social wage" and the case for universal basic services.
2. Office for National Statistics: Effects of taxes and benefits on UK household income — how "benefits in kind" such as health and education are counted.
3. Institute for Fiscal Studies: Green Budget 2009, chapter 5 — the 1997 golden rule and its strengths and weaknesses.
4. Resolution Foundation and LSE Centre for Economic Performance: Ending Stagnation (2023) — decades of low public and private investment in the UK.
5. Department for Education: RAAC in education settings – management information — schools and colleges confirmed to contain RAAC, and the measures put in place.
6. Open Access Government: NHS maintenance backlog nears £16bn (ERIC 2024/25) — the cost of outstanding repairs to NHS buildings in England.
7. Resolution Foundation: Home Affront – housing across the generations (2017) — how housing costs have grown as a share of income.
8. Addleshaw Goddard: UK publishes 10 Year Infrastructure Strategy (2025) — the £725 billion strategy, the 1.5 million homes target and £39 billion for affordable homes.
9. GOV.UK: Warm Homes Plan — support for insulation and cleaner heating.
10. GOV.UK: Great British Railways and the public ownership programme — passenger rail services returning to public ownership.
11. GOV.UK: Autumn Budget 2024 — the current fiscal rules, including borrowing only for investment.
12. Imperial College London: UK behind European countries on home upgrades — how quickly UK homes lose heat compared with the rest of Europe.
13. Ofgem: Energy price cap will give 11 million a fairer deal from 1 January (2018) — how the energy price cap was introduced in 2019.
14. GOV.UK: Response to the Independent Water Commission's final report (2025) — the government's view on failings in water regulation.
15. National Audit Office: PFI and PF2 (2018) — the scale and long-term cost of PFI deals.
16. CiTTi Magazine: Rishi Sunak scraps northern leg of HS2 (2023) — rising costs and the cancellation of HS2's northern leg.