Summary: The future of UK infrastructure took another step forward with the announcement of the formal establishment of the National Infrastructure Commission – but will the new NIC have the power it needs, given that it is not the truly independent beast that had been expected?
A reminder of where we thought we’d got to!
As we reported at the start of 2016 the UK National Infrastructure Commission (‘NIC’) was being hailed as the next big thing for UK infrastructure – an independent body, free from the shackles of the political cycle, which could truly assess what UK plc needs “to get Britain firing in all areas again” (as our new PM put it).
By late Spring of 2016 (see our report at that time), the NIC was up and running, albeit in shadow form - but with the Queen’s Speech in May 2016 making clear the expectation that the NIC would be a Non-Departmental Public Body, enshrined in statue, by dint of the proposed Neighbourhood Planning and Infrastructure Bill.
Then a little vote was cast in June (we’ll try to avoid the ‘B’ word here), and amongst other things the UK got a new PM and Chancellor – which meant the infrastructure laden speeches of one George Osborne would be no more.
And then something funny happened. Like the return of the popular tv series, someone got Cold Feet; and the ‘and infrastructure’ bit just disappeared. The industry reacted with some concern – including an open letter to the new Chancellor, signed by CBI director-general Carolyn Fairbairn, KPMG’s Richard Threlfall, British Chambers of Commerce acting director-general Dr Adam Marshall and London First director of strategy and policy John Dickie – reminding Mr Hammond (not the only Mr Hammond in a new job) that: “The overwhelming response of the Government’s extensive consultation was in favour of it becoming a statutory body, and its National Infrastructure Assessment being required to be laid before and voted on by Parliament.”
At the 2016 Conservative Party conference, the Chancellor made nice noises about the NIC but didn’t help us with its likely status: “Ensuring we have world class infrastructure is vital to maintaining our competitiveness but it is a very long-term agenda. One that can be, and often has been, knocked off course by short-term political considerations. That’s why we announced the National Infrastructure Commission. To define independently the nation’s long-term infrastructure needs to prioritise and plan to test value for money to ensure that every penny spent on infrastructure is properly targeted to deliver maximum benefit. And I recommit to putting the Commission at the very heart of our plans to renew and expand Britain’s infrastructure”.
And now the punchline
On 12 October 2016 the Government confirmed the basis of the NIC – not with full independence, nor on a statutory footing. Instead the Government confirmed that the NIC would:
- be put on a permanent footing as an executive agency which will help plan, prioritise and ensure efficient investment;
- have its own budget, freedom and autonomy, detailed in a charter;
- come into force in January 2017;
- have Sir John Armitt as interim Deputy Chair with immediate effect.
The ‘charter’ sets out up front that:
“The NIC will be required to carry out its work in accordance with the remit and the terms of reference for specific studies set by the government. In all other respects, the NIC will have complete discretion to determine independently its work programme, methodologies and recommendations, as well as the content of its reports and public statements.”
However it goes on:
“The government will provide the NIC with clear guidance by issuing a public remit letter. This will include a binding fiscal remit to ensure that the NIC’s recommendations would be affordable.” (our emphasis added) – presumably therefore we are no longer getting the originally planned independent assessment of the UK’s long term infrastructure needs – so does that mean undertaking an assessment that starts with current affordability, then looks decades ahead, and then works back?
The charter refers towards its end to the ‘mutually agreed Framework Document’ so perhaps that will help us with clarifying the scope?
More positively when consultations occurred in respect of the NIC, there was concern about what the Government might do with its recommendations.
Would they be under active consideration, or just under consideration – as one Bernard Woolly once put it – "under consideration" means "we've lost the file"; "under active consideration" means "we're trying to find it".
Well for the NIC the Government has committed to:
- issuing a formal response to all the recommendations contained in the NIC’s reports, stating clearly whether the government accepts or rejects the recommendations. The government will respond as soon as practicable, which should mean within 6 months in the vast majority of cases, and never longer than a year;
- giving reasons where it disagrees with the NIC’s recommendations, and where appropriate presenting an alternative proposal for meeting the identified need;
- laying the NIC’s reports and government’s response before Parliament as soon after their publication as practicable”
So whilst a year is a long time in politics (never mind a week in politics!), it isn’t long in the infrastructure pipeline, and there’s a clear commitment to always respond within that timescale.
In return the NIC must produce an Assessment (‘NIA’) once each Parliament, produce specific studies on areas of pressure, and hold the Government’s feet to the fire through publication of an annual monitoring report.
But just how far will the NIC feel able to go – given that at the end of the charter we are reminded that “The NIC will operate independently, at arm’s length from government, as an executive agency of HM Treasury.”
Rough with the smooth
Alongside this mixed news, a simultaneous call for ideas has been launched to inform the NIC’s next workstreams – responses are due after three weeks, by 2 November.
However this seems to do little to divert attention from the rather deflated position we find ourselves in. On the plus side, if we went back even a couple of years and said there would be any NIC at all, perhaps we’d all be rather keen – but one has to wonder just what caused the words ‘and infrastructure’ to disappear – and just how well the NIC can function for the nation under its new paymaster.