Infrastructure in the UK: Putting down routes
- Finance ,
Government announcements on infrastructure reveal a direction of travel but key details are still unknown, says Huw Morris
Boris Johnson chose another optimistic metaphor when announcing the UK's National Infrastructure Strategy (NIS). In his introduction to the 100-page document, the prime minister says it “will put the calcium into our national bone structure and the collagen in our national skin tissue”. But what is the NIS? What does it herald for the years ahead? And will it do what it says?
Originally scheduled for publication last March and finally unveiled in November alongside the Spending Review, the NIS sets out how £100bn will be spent on economic or ‘networked’ infrastructure – chiefly energy, transport, flood management and digital communications – during the financial year 2021-2022. The aim is to deliver “an infrastructure revolution” in line with net-zero and levelling up the country.
The government acknowledges that it is fully or partially following 80% of the recommendations of the National Infrastructure Commission made in 2018 – ironic, given that one of the NIS’s aims is to speed up major schemes.
“The government will need to redress deliverability and local government capital funding”
The NIS incorporates the Ten Point Plan for a Green Industrial Revolution unveiled by Johnson earlier in November. Together with the Spending Review, it shows a direction of travel, but not a route map. Key issues on decarbonisation and the levelling up agenda must wait for a battery of other government announcements (see box, ‘Details, details, details’).
The NIS gives policy certainty in some areas, but others have been “kicked down the road”, says David Diggle, a senior director at planning consultants Turley. “With any strategy, long-term commitment and review is necessary for success,” he says. “It is encouraging to read that the NIS is only the first step of a 12-month process to deliver 15 separate papers on key areas of infrastructure policy to advance further development. These documents, we hope, will provide the absolute clarity required to allow all component parts of the infrastructure industry, from developers to consultants and everyone in between, to come together with a clear set of guidelines to allow us to deliver this vision. Let’s see what the next 12 months brings.”
Other commentators offer caution. “Now that there is a strategy, the focus will move to how quickly these plans can be delivered,” says Alison Ring, director for public sector at the Institute of Chartered Accountants in England and Wales. “This concern is clearly shared by the Office for Budget Responsibility, which increased its expectation of underspends against capital budgets and cut back on forecasts for capital expenditure by local authorities, as they retrench spending following the pandemic. The government will need to redress both the deliverability and local government capital funding if it is to fulfil its ambitions of an investment-led economic recovery and a levelling up across the country.”
Details, details, details
The NIS, Ten Point Plan and Spending Review are important steps, according to the Institution of Civil Engineers (ICE), but “a lot of detail is yet to be seen”. That detail will be in a panoply of forthcoming strategies and consultation documents, including:
- The Integrated Rail Plan, to be published by February, covers phase 2b of HS2, Northern Powerhouse Rail and other planned rail investment in the Midlands. We also expect to see the Union Connectivity Review this month.
- The Net Zero Review is set to report by May on how the government intends to approach distributional issues on decarbonising the economy. This will be accompanied by a Hydrogen Strategy.
- The Offshore Transmission Network Review report, on connecting offshore wind, will be published this year.
- The Transport Decarbonisation Plan is to be unveiled by May, and will set out the sector’s contribution to carbon budgets and meeting net-zero.
- The Industrial Decarbonisation Strategy, on business models for hydrogen and carbon capture and storage to attract private investment, is to be published by November.
- The EV Charging Infrastructure Strategy is to be unveiled by November, as is the English Devolution and Local Recovery White Paper.
- A Cross-modal Freight Strategy and a 5G Supply Chain Diversification Strategy are expected in 2021, as is designation of new national parks and Areas of Outstanding Natural Beauty. The government also intends to develop a National Strategy for Disabled People to make the future infrastructure inclusive.
“This is an integrated challenge,” says ICE director general Nick Baveystock. “We need joined-up plans to achieve change, for example to ensure polluting forms of transport get phased out as greener sources of electricity come online, alongside the introduction of measures to replace the evaporation of fuel duty receipts. Connecting these dots is an area where policymakers should now focus their effort and attention.”
Putting the NIS, Spending Review and Ten Point Plan together
Investment Bank: A national infrastructure bank will be set up in the North of England to plug the hole left by the European Investment Bank. Local authorities and metro mayors will bid for a share of a £4bn ‘levelling up’ fund meant to help cities, towns and regions improve infrastructure and skills.
Flooding: The NIS doubles the money ringfenced to combat flooding to £5.2bn. This will deliver 2,000 defence schemes to protect 336,000 properties over six years, and reduce national flood risk by up to 11% by 2027.
Transport: Controversially, the government backs a £27bn roads programme as well as support for HS2; Green Party MP Caroline Lucas argued that “the biggest ever investment in new roads does not deliver a greener future”. The NIS confirms an accelerated rollout of electric vehicle (EV) charge points, with the government expecting a high-powered charging hub at every motorway service area by 2030. Some £950m will go to futureproof grid capacity for EVs along key roads and motorways, and a £90m local EV charging fund will support on-street charging. The Spending Review confirmed more than £5bn for public transport and cycling infrastructure.
Renewable energy: Around 65% of electricity generated in the UK will come from renewable sources by 2030, although the NIS says this is not a strict target. Floating offshore wind, solar and onshore wind can take part in the contracts for difference auctions.
Four carbon capture and storage clusters will be supported to the tune of £1bn by the end of the decade to meet the government’s target of capturing 10 megatonnes of CO2. A £240m Net-Zero Hydrogen Fund will tackle ‘blue’ hydrogen produced through CCS and ‘green’ hydrogen from electrolysis. The government is aiming for 5GW of low-carbon hydrogen capacity by 2030.
Nuclear: December‘s Energy White Paper outlined the government’s intention to “bring at least one large scale nuclear to the point of final investment decision by the end of this parliament”. Separately, the government will hold talks with EDF over the £20bn Sizewell C nuclear plant, with the focus on funding. The white paper suggests “additional nuclear” will be needed beyond Hinckley Point C, the only nuclear plant under construction. The Ten Point plan and the NIS pledged £525m towards large-scale nuclear and advanced nuclear research and development.
Buildings: By the 2030s, the UK needs to install 1.7m new heating systems a year, up from 30,000 currently. The NIS confirms the government’s launch of a £320m Heat Networks Investment Project, but only says the Future Homes Standard will be introduced in “the shortest possible timeframe before 2025”. The government aims to deliver 600,000 domestic heat pump installations by 2028 and will invest £81m into a hydrogen-powered neighbourhood and village.
Reforming national infrastructure planning
Last summer the Treasury’s Project Speed initiative looked at improving the lifecycle of infrastructure schemes. The result will be the launch of a National Infrastructure Planning Reform Programme. This aims to reinvigorate the Nationally Significant Infrastructure Planning (NSIP) regime, bring government departments together and deliver better and faster outcomes. Under the programme:
- Timescales should be slashed by up to 50% for some projects entering the planning system from September 2023
- A project ‘acceleration team’ of planning experts is to speed up infrastructure schemes
- The regime’s performance will be monitored, there will be co-ordination with government departments on reviewing National Policy Statements (NPSs), and ‘effective engagement’ with infrastructure departments, statutory consultees, the Planning Inspectorate and industry will be ensured.
The NIS suggests the government may review 3all NPSs. By May, the Infrastructure and Projects Authority will publish more details on the roadmap to delivering major schemes, while the government is also developing a national underground assets register.
All major infrastructure projects will have a design champion at board level by the end of this year, according to the NIS, and would be supported where appropriate by design panels.
The Competition and Markets Authority (CMA) has published a new 'Green Claims Code' to ensure businesses are not misleading consumers about their environmental credentials.
Over two million hectares of Brazilian rainforest could be legally converted to supply the UK with soy under a new anti-deforestation law proposed by the government, the WWF has found.
In Elliott-Smith v Secretary of State for Business, Energy and Industrial Strategy, the claimant applied for judicial review of the legality of the defendants’ joint decision to create the UK Emissions Trading Scheme (UK ETS) as a substitute for UK participation in the EU Emissions Trading Scheme (EU ETS).
In R. (on the application of Hudson) v Windsor and Maidenhead RBC, the appellant appealed against a decision to uphold the local authority’s grant of planning permission for the construction of a holiday village at the Legoland Windsor Resort.
In R (on the application of National Farmers Union) v Secretary of State for the Environment, Food and Rural Affairs, the claimant applied for judicial review of the Secretary's direction to Natural England concerning badger culling.