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August 17, 2026
Has collaboration weakened cost discipline in UK infrastructure?
One of the privileges of working on many of the UK and Ireland’s largest infrastructure programmes is the perspective it gives us on the wider market.
Our conversations span clients, contractors and consultants working on major projects, while a number of our current assignments involve searching internationally for talent. That gives us an interesting opportunity to compare experiences across the UK with markets including Ireland, Canada, continental Europe and the Middle East.
Recently, one theme has come up often enough to make us think.
As UK infrastructure has become more collaborative and cost reimbursable contracts (with incentive payments) more prevalent, have we inadvertently weakened some of the discipline around managing cost?
There are good reasons why the UK moved towards collaborative contracting.
Major infrastructure is inherently complex. Designs evolve, ground conditions surprise us, requirements change. If a client cannot define precisely what it wants to buy, asking a contractor to provide a fixed price can create its own problems.
Contractors either price significant uncertainty into their bids or find themselves commercially exposed when circumstances change.
Collaborative models have address some of these challenges - encouraging transparency, and importantly, joint problem-solving.
But has that evolution since the Latham report in 1994 had unintended consequences?
Who is really incentivised to manage cost?
This is where many of our recent conversations become interesting.
At one end of the spectrum, a contractor operating under a traditional fixed-price arrangement has an obvious incentive to control expenditure - if delivery costs more than anticipated, its margin suffers.
At the other end, under highly collaborative arrangements, a greater proportion of actual costs may ultimately be carried by the client. Contractors may instead be strongly incentivised around milestones, programme or other performance measures.
There are clear advantages to that approach. But incentives inevitably influence behaviour.
If the client ultimately carries much of the cost risk, is the contractor incentivised to manage cost with quite the same intensity?
More importantly, what happens to cost management capability over time? If project teams spend much of their careers working on contracts where their exposure to pain of cost overruns is limited, do they develop the same commercial instincts as teams accustomed to fixed priced lump-sum environments where poor cost management has a direct impact on profitability?
A different perspective from international markets
Our international recruitment work makes this particularly interesting.
We regularly speak with people who have delivered major projects under very different commercial environments. Ireland and Canada are increasingly adopting collaborative approaches, while contractors in parts of continental Europe and the Middle East are generally more accustomed to carrying greater cost risk.
We see differences in the experiences and commercial instincts people bring with them as a result.
That does not mean one approach is better. The projects, procurement environments and construction markets are different, and fixed-price contracting brings well-documented challenges of its own.
But exposure to different markets does make you wonder whether repeatedly carrying financial risk develops a different kind of cost-management muscle.
If it does, how do collaborative markets make sure they retain it?
Perhaps the contract isn't the real question
This may ultimately be less about choosing between collaborative and fixed-price contracting and more about designing the right incentives.
The important question therefore might not be “How collaborative is the contract?”
It might be “What behaviours are we incentivising?”
If cost is ultimately being passed through to the client, there needs to be sufficiently meaningful mechanisms elsewhere in the commercial model to keep cost management front and centre.
Otherwise, even very capable organisations will naturally focus their attention on the outcomes against which they are most strongly incentivised.
Has the pendulum swung too far?
The UK moved away from more adversarial forms of contracting for good reasons. Few people would advocate returning to an environment characterised by excessive risk transfer, claims and disputes.
But perhaps the interesting question for the next generation of infrastructure is whether the pendulum has moved slightly too far in the other direction.
From our position across multiple major programmes - and from comparing the experiences of professionals working in different international markets - we are hearing enough discussion around this issue to believe it deserves consideration.
The answer is unlikely to be less collaboration.
It may instead be better-designed collaboration.
With affordability increasingly central to the infrastructure debate, preserving that cost-management discipline may be every bit as important as choosing the contracting model itself.
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