You should read this update if you are involved or interested in UK infrastructure planning, delivery and investment.

How the UK plans its major infrastructure is crucial to making sure the country gets what it needs.  This article explores the announcement of a new infrastructure commission by UK Chancellor George Osborne, and what it might mean for UK infrastructure delivery.

Overview

UK Chancellor George Osborne has today announced that the UK will have a new national infrastructure commission.

The Chancellor said that the commission will be “set up in law, free from party arguments”, so that it “works out calmly and dispassionately what the country needs to build for its future”, and that it would “hold any Government’s feet to the fire if it fails to deliver”.

He indicated that the new commission’s initial priorities would be in respect of the transport system in London, connections between cities in the north of England (noting the recent focus on the ‘Northern Powerhouse’), and the energy network.

Background to the commission

In October 2012, the Labour Government commissioned Sir John Armitt to lead a review of ‘long term infrastructure planning’, and that commission reported in late 2013. We explored this in a previous blog.

The 2013 report’s main recommendations were:

  • Establish a National Infrastructure Commission to be at the forefront of identifying  UK’s infrastructure needs across all sectors;
  • National Infrastructure Commission to be comprised of industry experts independent of government and civil service;
  • Once a decade, NIC to prepare an holistic National Infrastructure Assessment –  considering all infrastructure needs in parallel over a 25-30 year horizon and recommending priorities over 5, 10 and 20 years;
  • Parliament to approve the National Infrastructure Assessment;
  • Govt Departments to produce Sector Infrastructure Plans, based on the National Infrastructure Assessment, for approval by Parliament and once approved to replace current National Policy Statements for “nationally significant” projects of a scale and kind now covered by the Planning Act 2008;
  • Economic regulators to be under a duty to further the National Infrastructure Assessment and Sector Infrastructure Plans once approved by Parliament; and
  • National Infrastructure Commission to produce to Parliament annual reports on progress in meeting the long term.

Subsequently, in February 2015, the Labour party presented their thoughts on the need for a commission, and how this would work, including a draft remit for any such commission.

In the draft remit, the stated goals were:

  1. The infrastructure to help deliver more good jobs, stronger and more balanced growth and rising living standards for all
  2. The most connected and open trading nation in the world
  3. The best place in the world to do scientific research
  4. A decarbonised power sector and infrastructure that meets the challenge of climate change
  5. A transport network which spreads growth and prosperity to every part of the country
  6. The most advanced telecommunications economy in the world
  7. The most resource efficient economy in the world
  8. A secure, sustainable energy system
  9. Five cities in the European top 20 for growth between now and 2045
  10. The infrastructure, new towns and urban extensions to ensure 200,000 new homes a year by 2020 and that we are meeting need by 2025.”

The Armitt review also lead to the production of a draft National Infrastructure Bill, which would have established the commission had Labour won the 2015 General Election.

As we know, they didn’t, so this work has rather been in the background ever since, and the subject of English devolution has seemingly been the more pressing concern.
Until now.

Devolution and infrastructure

As we reported previously, one of the big issues for English devolution and infrastructure provision is how it is all ‘knitted together’, and on this front the Chancellor also announced that the Government would “allow local government to keep the rates they collect from business … all £26bn of business rates will be kept by councils instead of being sent up to Whitehall. We will also give councils extra power and responsibilities for running their communities.”

So the devolution continues and perhaps one can anticipate that the new commission could provide part of the cohesion, by providing a plan within which infrastructure planning and delivery can occur.  Or is it the case that the commission will remain focussed on the biggest infrastructure, with less ‘nationally significant’ schemes falling to local authorities to secure?  Or will the plans of devolved administrations be woven into the National Infrastructure Plan?

We will simply have to await the detail of the remit of the commission.

What might the new commission mean for those engaged in delivering and investing in UK infrastructure?

Much of the detail of how the commission will function is awaited, but the announcement has (unsurprisingly) been greeted as a positive by the industry.

The commission should allow the recent renaissance in infrastructure planning to remain in full flow, and allow the UK offering to be viewed with even more certainty and confidence by the international community.

It should enable the Government to make long term plans for infrastructure provision in this country, which is the backbone around which development can continue to deliver what society needs, and to enable the next generation to prosper.

What about policy?

Whilst a strategic plan is important, how it manifests itself in policy will be critical for delivery.

Since 2010, and the beginning of the Conservative / Lib Dem coalition, the UK Government has produced a National Infrastructure Plan (‘NIP’) every autumn, which lists the main projects in the UK and notes their progress.

In the 2015 Productivity Plan, the Government said it would: “publish a new long-term National Infrastructure Plan for the key economic infrastructure sectors – transport, energy, flood defences, water, waste, communications and science. This will be supported by annual updates on progress with delivery.”

The NIP to date has covered all of the various sector areas that make up UK infrastructure, with last year’s 2014 NIP covering: roads, rail, local transport, aviation, ports, energy, floods and coastal erosion, communications, water, waste and science and research.  So of that list, we can see that through a wide use of the term ‘transport’ in the Productivity Plan, all the areas covered by the NIP are, at least at a headline level, badged as being ‘key’ economic sectors.

The Productivity Plan made it clear that the NIP will evolve and provide greater detail and focus on certain sectors.  It is worth remembering that, alongside establishment of a National Infrastructure Commission, one of the primary recommendations of the Armitt Review was the creation of ‘sector infrastructure plans’, albeit they were likely to be more akin to National Policy Statements (with the associated advantages and disadvantages).

So at present it looks like we will have the sector plans as announced in the Productivity Plan, and these will be informed by the recommendations of the new commission.

Conclusions

Whilst we await the details, the new commission seems to be good news for all sides of the industry and for all those engaged in delivering or investing in UK infrastructure.

The next question will be as to timing and how the commission avoids some of the delays and pitfalls which the Armitt-conceived commission was argued to face.

But for now, a good day for UK infrastructure.