NIC fires starting gun on shaping the future of UK infrastructure

It’s been nearly three years in the making and marks the culmination of the first phase of work in shaping the future of UK infrastructure but the industry reaction to the National Infrastructure Commission’s (NIC) first ever National Infrastructure Assessment (NIA) has been overwhelmingly positive with invested parties now waiting to see how the government responds. 

The publication of the assessment document is a notable landmark in a process that began in October 2015, when the establishment of the commission was announced. 

Many in the industry have said that the report provides the blueprint for infrastructure investment going forward and some of the largest firms and trade associations are demanding that minsters stand up and take note. 

What makes it different to anything else is the fact that it’s the first time an independent body been set up to look across sectors with a long-term perspective and to provide policy advice to government on a permanent basis.

The report is no one-off and those within the commission will be completing the same process every five years in the future and holding the government to account for delivery in the meantime.

The much-anticipated report sets out the nation’s long-term strategic needs in transport, water, digital technologies, waste and energy. NIC chairman Sir John Armitt says the purpose of the UK’s first ever assessment is “to think beyond the technologies of today and to ensure we can make the most of future innovations”. 

Sustainability is a central theme throughout. A switch to greener ways of providing energy to homes and businesses without increasing bills is said to be possible if ministers “act now” and invest in low cost renewable technologies, such as wind and solar, rather than accelerate the numbers of large nuclear plants. 

"I believe we are firing the starting gun on what the next generation of project investment might look like. We should not assume that the next generation will look like those of past."
NIC chief executive Phil Graham.

The NIC recommends that established technologies like wind and solar power be allowed to compete to deliver most of the extra renewable electricity needed as overall demand increases and sets out a clear pipeline, with dates and budgets, for future auctions to support renewables. Speaking to Infrastructure Intelligence, the NIC’s chief executive Phil Graham, says the government should be “cautious to committing” to lots of nuclear power stations and believes the energy sector is likely to be a lot more decentralised and focused around smaller renewable technologies in the future. 

“I believe we are firing the starting gun on what the next generation of project investment might look like,” said Graham. “We should not assume that the next generation will look like those of past. Sustainability does run through the assessment we produced, and it’s is crucial to what we say. However, in many cases we are not saying that you make a sustainable choice simply on the basis of environmental reasons, rather that these sustainable choices make more and more sense for economic and practical delivery reasons,” he said.

Funding will always be a concern when it comes to ensuring needs are met and senior bosses of some of the biggest firms within the industry have called on the government to back the plans. But the NIC chief executive says he is assured that recommendations can be implemented thanks to the work that has been put into costing. 

“I am pretty confident the funding can and will be in place,” Graham said. “We didn’t just do this in isolation of understanding levels of infrastructure investment available. We were guided by the Treasury in terms of the level of availability of funding going forward and the fiscal remit set by government - we had to do our work.

“Everything that we have recommended is affordable within the limits set. There is a question as we head into the budget and spending review whether that guideline will be returned by the government. I am hopeful it will remain the case and I would not know why they would set it if there wasn’t a strong chance of it being adhered to. But it’s incumbent on the industry to ensure that the government commits to its guideline,” said Graham. 

Another central theme in the report is for £43bn of long-term transport funding for regional cities with an increased role for metro mayors in the development of infrastructure within their regions. Graham would also like to see devolved powers for areas without metro mayors. 

The NIA’s spending plans include funding for projects including Crossrail 2 in London, and Northern Powerhouse Rail linking the major northern cities and recommends a boost in funding for major cities totalling £43bn to 2040, with cities given stable five-year budgets, starting in 2021. 

Graham said: “Broadly speaking the devolution of powers to metro mayors has been a huge step in the right direction; they are getting close to the right sort of powers that they need. There are small tweaks that you can make but the real key now is matching powers with funding, so mayors have a long-term budget they can plan around and make the most of the powers they have.” 

Moving forward, Graham is hoping the commission can put forward some place-based proposals that will give context to the recommendations set out in the report. But reflecting on the landmark document produced by the infrastructure tsar, he says he was surprised that responses did not focus on calls for lots of new expansive projects like new tram lines, reservoirs or bridges. 

Rather, the report published centres around long-term needs and policies ensuring planned schemes are a success.

“One of the really important things that came out of that paper was the need not to just talk to the industry but to talk to the public as well,” Graham added. “The focus groups we ran were a way of finding out what type of things the public really cared about moving forward and something not usually historically done by the government. The infrastructure sector has huge program of work over the next decade, so the document focuses more on the long-term needs of the country and the how best to ensure the projects already in the pipeline are delivered successfully,” he said.

Since the report was published at the start of July, some of the biggest firms within construction, engineering, architecture and law have come forward to back the recommendations and call for it to be supported politically and financially. 

Jonathan White, UK head of infrastructure, building and construction at KPMG, said: “I’m impressed with a comprehensive review from the commission that challenges government to take the necessary steps to ensure that the UK’s infrastructure is fit for purpose in the future. By taking on board the assessment’s recommendations, the government can send a signal that the UK is open for business and has a clear plan.” 

David Whysall, managing director of Infrastructure at Turner & Townsend, added: “The NIA sets out a bold vision for a UK which is better connected, more sustainable and more productive. The onus is now on government, infrastructure clients and the construction supply chain to back and deliver this vision.”

Liz Dunn, partner for infrastructure consenting at law firm Burges Salmon, said: “A key issue that it addresses is the need to encourage investment in green projects and technologies. The infrastructure sector has the ability, skills and resources to deliver what the public sector needs and by collaborating towards common aims and working in partnership they can achieve the government’s ambitious aims.”

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