A new consultation published by HM Treasury seeks views on the governance, structure and operation of the National Infrastructure Commission (NIC), which was first announced in October 2015.

The NIC, first announced in October 2015, will provide an assessment of the UK’s long-term infrastructure needs across all key economic sectors (including energy, transport, water and waste water, waste, plus flood defences, and digital communications) over a 10 to 30 year time horizon.  This it is intended will assist the Government to develop a long-term, cross-sector strategy for delivering the infrastructure the UK needs.  The NIC's objectives are not subject of the consultation, but the document seeks views on seventeen specific questions.

Objectives and scope

The principal activities of the Commission will be to produce a National Infrastructure Assessment (NIA) once each Parliament setting out its analysis of the UK’s infrastructure needs over a 10 to 30 year horizon (covering all key economic sectors), and carry out high-profile priority studies on more specific areas.  The NIC will consider the impact of the provisions of infrastructure on other key economic objectives including productivity and employment.  The intention is to help make "planning policy more responsive and effective, supporting efficient decision-making and delivery" as well as to "promote a more consensual approach to policy making".

Importantly, the NIC will not re-open decision making processes where programmes and work have been decided.  Therefore projects already identified for current control periods (such as in the rail, energy and water sectors) will not be affected.  In addition, the Government has confirmed that the NIC will not revisit government decisions on airport capacity in the South East following the final report of the Airports Commission. 

The consultation states that the Commission will initially concentrate on areas of UK Government competence only.  In future this may evolve and include work in areas of devolved competence if asked to do so by the Devolved Administrations.

The consultation suggests that the NIC will have the right to request information and analysis from government departments and other relevant public bodies, but also seeks views on this

Housing supply

Whilst the consultation reaffirms the Government's commitment to delivering housing through Local Plans and in consultation with local people, it recognises that infrastructure can affect the viability of both large and small housing projects.  Therefore, the NIC will consider the potential impact of infrastructure decisions on housing supply.   The consultation also says that information "about the location of strategically important housing allocations, such as new settlements and urban extensions and when they will come forward, will be an important component of the evidence base collected" by the NIC and that recommendations may "co-ordinate the timing and delivery of new infrastructure with the delivery of new housing".  However the NIC will not make recommendations on social infrastructure (i.e. hospitals, schools and prisons).  

Status and governance

The consultation proposes that the NIC will operate as a Non Departmental Public Body (NDPB) separate from the Crown, established by legislation, and answerable to the Treasury; it seeks views on this.  Further, it outlines its anticipated governance structures. 

Outputs

The consultation suggests that NIAs will be published and laid before Parliament for scrutiny and legislation will provide a means for Government to do this.

The enabling framework for detailed reports that address specific infrastructure questions (which may be sector or technology specific) will be set out in legislation.  The specific commissions will establish need, economic case and may feed into national policy.    

The Government will be required formally to respond to the recommendations of the NIC.  Those recommendations accepted by Government would become "Endorsed Recommendations".   These the consultation states would become Government policy.  Further, the implementing legislation will place an obligation on regulators to 'have regard' to Endorsed Recommendations.

The consultation suggests that the precise timing of reports would not be set out in legislation, but would be agreed by HM Treasury and NIC.

The consultation questions seek views on whether the NIA should be laid before Parliament, the timetable for the Government response; whether the specific reports should be laid before Parliament or if this should be discretionary; and whether economic regulators should have to 'have regard' to Endorsed Recommendations.  

The Commission’s remit

The consultation states that the NIC will operate independently of Government, but within a broad remit and GDP envelope set by the HM Treasury.  The Chancellor will provide the commission with fiscal and economic guidance to ensure its recommendations are affordable, and provide the NIC with a broad strategic framework. 

The consultation suggests that economic and fiscal remit would be set in a formal letter from the Chancellor at the beginning of every Parliament, and may highlight pressing objectives, for example supporting regional economic growth or delivering sustainable growth.

Planning

The consultation outlines how Endorsed Recommendations from NIAs and priority studies could be accommodated by the planning system, and suggests that this may include reviewing National Policy Statements (NPS).

The consultation suggests that Endorsed Recommendations are likely to be material considerations in both the NSIP and the locally-led planning regime.  The weight that should be assigned will be for decision makers, however the Endorsed Recommendations would be expected to influence decision-making through two complementary but not mutually exclusive routes.

First, Endorsed Recommendations would be Government policy. This should mean that they carry weight in the planning system, commensurate with the quality, depth and nature of the work done. This would signal that decision-makers should take appropriate account of the Endorsed Recommendations as a material consideration.

Second, where appropriate the Government could signal that the Endorsed Recommendations would be transposed into or reflected in NPSs by the relevant department.  Under such circumstances, departments may need to undertake further consultation and environmental assessment in accordance with European law and the statutory requirements for preparing an NPS. The consultation also states that it will also be open to the Government to reject a recommendation. In these circumstances, the recommendation would not be carried through to Government policy, but the evidence base used in support of the recommendation may still be a material consideration for decision or policy making purposes.

The consultation seeks views on whether departments should be given a timetable within which they must incorporate new Endorsed Recommendations into NPSs.  It also seeks views on the suggestion that, if the NIC has done the equivalent consultation and publicity for amending an NPS when producing its recommendations, then this should not need to be repeated by the Secretary of State when preparing a NPS. 

The consultation states that it is intended that the Government will issue guidance that will provide information to policy and decision makers about how to use the NIC's output.

Comment

The procedure for reviewing NPSs is set out in section 6 of the Planning Act 2008, and all or part of an NPS may be reviewed if there have been significant changes in circumstances that were not anticipated in the NPS.  It is also possible to amend an NPS even if such aforementioned circumstances have not occurred, because the 2008 Act allows the appraisal, consultation and publicity requirements to be skipped if the Secretary of State considers that the amendments do not materially affect the policy in the NPS, in any other case the full appraisal, consultation and publicity requirements would apply. 

Amendment without the application of the full consultation process could be very controversial.  Review of an NPS is also likely to introduce uncertainty into the system and entail the delay of the review process itself which also includes a period of Parliamentary scrutiny.  Investors are likely to be concerned by the possibility that an NPS could be reopened and consulted on or changed.  It is also open to question if the full process could be carried out in one year. 

Review of an NPS may also have implications for live applications or decisions which may be suspended pending the outcome of the NPS review (section 108 of the Planning Act 2008). 

The suggestion that the Government will provide further information on this is therefore to be welcomed and it is hoped that this would provide further clarity on review and amendment of NPSs in particular.       

Next steps

Once the consultation has finished, the Government will publish a summary of responses. It will also decide what steps, if any, to take in relation to legislation which it will lay before Parliament.

The consultation runs until 17 March 2016.