As part of the Build up to the chancellor's Autumn Statement, The Infrastructure Plan 2014 (NIP 14) was published on 2 December 2014.
The Chief Secretary to the Treasury (Mr Danny Alexander), in a Written Statement to Parliament (endnote 1) outlined the Government’s commitment to infrastructure in the build up to the last Budget for this Parliament, due in March 2015 (endnote 2).
NIP 14 reports that just over 60% of the projects and programmes in the pipeline (excluding oil and gas) are now in construction or part of an active programme (compared with 45% in 2013). It reports that the percentage of projects in scoping has fallen marginally from just under 30% to circa 25%.
The percentage for projects in planning & consenting has changed little with NIP 14 showing it at circa 10%. While the percentage of projects which have had consents approved appears to have fallen from circa 20% to circa 5%.
While also summarising the progress that has been made since 2010 (endnote 3), the NIP 14 sets out the infrastructure vision for the next parliament and beyond, for each of the economic infrastructure sectors.
The refreshed Pipeline, published alongside NIP 14, sets out £466bn of planned public and private investment across the key infrastructure sectors; (endnote 4).
Click here to view the table.
IP 14 sets out that £55bn of investment (including £12bn oil and gas) is planned for 2015-16: energy £25.7bn, transport £17.7bn, communications £5.4bn, water £4.7bn, waste £0.7bn, science £0.5bn and flood £0.4bn.
NIP 14 also states that the infrastructure spend up to 2020-2 will be over £320bn (including £53bn oil and gas).
Long term challenges
NIP 14 sets out the action the government is taking on issues such as skills, asset management, further improvements to streamline the planning system, and the integration and resilience of key networks, to ensure effective delivery of its key projects. Identified key longer term challenges include population growth with the UK population anticipated to grow by 25 million (to 90 million) by 2020 and placing particular upward demand on services like energy, water and transport. Climate change as a key challenge to the sustainability and resilience of networks and assets is identified as the key driver for changes in transport and energy systems and in making these 'greener'. Technological advances are expected to drive changes particularly in the communication and transport sectors.
NIP 14 reiterates the Government's commitment to allow every region in the UK to maximise its economic potential, and to give local authorities, cities and regions the autonomy to determine what is delivered locally, and ensuring they have the ability to influence the regional and national infrastructure that will shape their areas.
At a regional level, the government encourages LEPs, local authorities and cities to come together and work with central government to shape the infrastructure that they need in their own areas. NIP 14 notes that the Strategic Economic Plans (39 LEPs have produced these), act as the starting point for a dialogue on the priorities for spending.
City Deals and Growth Deals
Government has also given local areas control over infrastructure investment through the mechanisms of City Deals and Growth Deals.
A key element of several City Deals has been the establishment or strengthening of economically prioritised infrastructure spending programmes – notably in Greater Manchester, Glasgow and Clyde Valley, and Greater Cambridge which will see a combined investment from central and local government along with private sector partners of over £3.5bn. A total of 28 City Deals have been concluded over this Parliament; 27 in England and one in Scotland (Glasgow and Clyde Valley).
The Growth Deals provide LEPs with money from the Local Growth Fund (LGF) and have provided the opportunity to bring together LEP, local authority and private sector resources behind the key priorities of the local economy as set out in the Strategic Economic Plans. Of the 332 transport schemes partially or fully funded through the LGF, approximately 90% will be free from any further central government approval (compared with circa 50% under the previous approvals system). The first round of deals, agreed in July 2014, saw £6bn allocated across 39 LEPs. The LGF combines £12 billion of spending allocations across transport, housing and skills over the six year period to 2020-21.
NIP 14 also records specific sources of funding to help unlock local investment in infrastructure and other growth projects including the Growing Places Fund supporting 323 projects across the country. Also the £3.2bn Regional Growth Fund with over £168m used for local transport and utilities development and over £78m for energy schemes. A further round of successful bidders is to be announced in spring 2015
National infrastructure to support and stimulate regeneration
- The government also recognises that key national infrastructure schemes can be instrumental in unlocking regeneration or housing projects in local areas and NIP 14 sets out government support for:
- Northstowe: for accelerated delivery of up to 10,000 homes, and to evaluate the feasibility of using this model at a wider scale to support and accelerate housing supply.
- Barking Riverside: for a loan of £55m to support the extension of the Gospel Oak to Barking Line to Barking Riverside, to unlock the delivery of up to 11,000 new homes.
- Ebbsfleet: £100m to fund infrastructure and land remediation, taking forward the first new garden city, which will deliver up to 15,000 new homes. Improvements to the A2 Bean and Ebbsfleet Junctions will be delivered as part of the Highways Agency programme. The government to undertake a review of transport provision for the Ebbsfleet area, including Crossrail, High Speed 1, Southern and Southeastern rail services.
- Brent Cross: the London Borough of Barnet and GLA plans for the regeneration of Brent Cross which could deliver 7,500 homes, subject to a full business case.
- Queen Elizabeth Olympic Park redevelopment (Olympicopolis): £141m to support the London Legacy Development Corporation and Mayor of London’s plans to build a new higher education and cultural quarter at the Queen Elizabeth Olympic Park.
NIP 14 states that the HS2 local growth strategies are due to be finalised in spring 2015 and that local delivery bodies will be set up by summer 2015. NIP 14 states that the Government will also continue to consider proposals for a central HS2 regeneration and development company.
Key areas of publicly funded infrastructure
These areas are roads, rail, flood defences and science. NIP 14 sets delivery plans for the next parliament (including details of specific projects and programmes) and it highlights the following:
- £15bn of investment in the Strategic Road Network as part of a new Road Investment Strategy which will include undertaking over 100 major schemes to 2020‑21, including transformational projects for the A303 and A1 north of Newcastle
- £2.3bn programme of flood investment investing in over 1,400 schemes to protect at least 300,000 homes; underpinned by a detailed pipeline of individual schemes including at Oxford, Lowestoft, Yalding, River Thames and the Humber
- £38bn Network Rail delivery programme, including electrification of key lines, as well as commitments to transformational projects such as Crossrail, phase 1 of which is due to complete in 2018, and HS2, phase 1 of which is due to start construction in 2017
- continued support for digital infrastructure which will ensure that 95% of premises have access to superfast broadband by 2017
- an ambitious programme of investment in science infrastructure, including a new polar research ship and Met Office supercomputer.
Key areas of privately funded infrastructure
The NIP also includes plans for energy, water, waste, aviation and ports where most or all of the investment comes from the private sector. The NIP 14 makes it clear that the Government expects that the majority of the Pipeline is expected to be privately funded and financed, but it sets out some key policy milestones to 2020-21 in these sectors, including:
- implementation of the final stages of Electricity Market Reform to support long-term investment in electricity generation, with the first Capacity Market auction taking place in December 2014 and the first Contracts for Difference being allocated under the enduring regime in early 2015
- publication of the Airports Commission’s final report on airport capacity in the South East in summer 2015.
Since 2010, the government has implemented a number of initiatives to incentivise private investment including the £40 billion UK Guarantees Scheme. NIP 14 anticipates that around a further £80bn of project-specific finance (primarily in non-regulated sectors) is likely to be required between now and 2020.