A review into the UK’s ability to plan its future infrastructure needs has been published. Undertaken by Sir John Armitt, formerly Chief Executive of Network Rail and Chairman of the Olympic Delivery Authority, the review, commissioned by the Labour Party, called for the establishment of an independent National Infrastructure Commission (“NIC”) to set the agenda for planning ‘nationally significant infrastructure’ – energy, transport, water, waste and telecommunications.

Why is a National Infrastructure Commission necessary?

The Review highlighted key failings in the UK’s ability to take a long term view of its future infrastructure needs. The UK has a proven track record in delivering major infrastructure including the Olympics, HS1 and Crossrail but successive Governments have failed at the ‘front end’ of the project cycle, due to incoherent strategic planning and a lack of cross-party political consensus.

Approximately 60% of the UK’s ‘key economic infrastructure’ is privately owned. Although this has increased efficiency, it has resulted in short-termism when it comes to investment and planning. As one unnamed respondent to the Armitt Review put it: “At present, no single body in the UK takes a view of what the picture on the front of the jigsaw box looks like. Rather we hope it comes together, mainly by chance, via the work of a number of separate parties such as investors, regulators and Government.”

New infrastructure can be very political – HS2 and a potential third runway at Heathrow are prime examples. The thinking behind the NIC is that long term infrastructure planning by experts, free from political pressure would result in considered decisions based on sound evidence. No infrastructure planning in the UK appears to take this approach currently and by 2035 the UK population is estimated to have risen to 73 million.  The Review asked the question “How will our national infrastructure cope with another 10 million people”?

How would the NIC change infrastructure planning?

The NIC would be independent of Government and responsible for outlining the infrastructure necessary in the long term. This would follow the approach of other countries such as Australia, New Zealand and Singapore, who have successfully set up similar bodies.

Every decade the NIC would produce an evidence based assessment of the UK’s infrastructure needs over the next 25-30 years, known as the National Infrastructure Assessment or “NIA”.

The NIA would lead to Parliamentary debate and relevant Government departments would produce ‘Sector Infrastructure Plans’ (“SIPs”). The SIPs would outline plans for funding, timeframe for implementation and the vehicle for delivering the infrastructure. SIPs together would form the National Infrastructure Plan (“NIP”).

The NIC would have a role in monitoring the manner in which the Government is implementing the NIP and report to the Chancellor on an annual basis.

Just another Quango?

The funding of infrastructure is a major political issue and the Armitt Review does not offer any solutions in that respect. The responsibility for allocating funding for infrastructure would remain with the Government.

The Chancellor would still have to strike an uneasy balance between increasing taxes and reallocation of resources from other projects. This could lead to the relationship between the Chairman of the NIC and the Chancellor becoming confrontational where they disagree on future infrastructure needs. It remains to be seen whether giving an independent body responsibility for driving it forwards would avoid the political debate delaying the likes of HS2 and airport expansion.

The NIC may be able to produce a grand plan but without long term funding solutions, there is a real danger than the NIC would fail to meet its objectives of ensuring that Governments deliver the infrastructure the UK needs.