Out-Law News 2 min. read

UK publishes long-awaited National Infrastructure Strategy

The UK government has unveiled plans for a “radical improvement” in the quality of infrastructure as it published its long-awaited National Infrastructure Strategy in tandem with the Spending Review.

The strategy, delayed from spring 2020 (100 page / 11.9MB PDF), sets out a plan for long-term investment in the UK’s infrastructure as well as highlighting the short-term imperative to boost the economy following the Covid-19 pandemic.

The government said the strategy was designed to address issues that had held back UK infrastructure, including “stop-start” public investment, slow adoption of new technology, policy uncertainty, and delayed project delivery. It would also help the UK meet its target of net zero carbon emissions by 2050, boost productivity across the country, support private investment, and accelerate project delivery.

The National Infrastructure Strategy also reflects the government’s reform programme, Project Speed, which was launched in summer 2020 to review the infrastructure lifecycle and identify where improvements could be made.

The publication of the strategy comes as chancellor Rishi Sunak announced the establishment of a National Infrastructure Bank during his Spending Review speech.

Infrastructure expert Jon Hart of Pinsent Masons, the law firm behind Out-Law, welcomed the launch of the infrastructure strategy.

“In contrast to the Spending Review, which is focused on the next 12 months, the strategy seeks to look further ahead into the shape of the nation’s infrastructure in the years ahead. In headline terms, it expands its view beyond economic infrastructure to wider considerations of social infrastructure,” Hart said.

“It acknowledges the importance of the continued roll out of Project Speed and the need for the National Infrastructure Commission to be crucial in delivering outcomes. The strategy also re-affirms the importance of private investment in infrastructure and the need – especially in relation to utilities – to provide greater certainty and stability.” Hart said.

Planning law expert Robbie Owen said the infrastructure sector had been awaiting more details on Project Speed, as it will play an important part in the government’s 'levelling up' agenda designed to address regional inequalities.

“In order for this to be achieved, the government needs to focus not just on planning and consenting processes and timescales but on the whole system involved in project delivery, which currently takes too long,” Owen said.

“It is therefore good to see a comprehensive coverage of the issues in the strategy, from planning and environmental regulations including establishing a National Infrastructure Planning Reform Programme, procurement and construction to more effective decision-making, capability and leadership. Particularly critical is that the government urgently reviews and updates the ageing suite of National Policy Statements [NPSs] which apply to large scale transport and energy projects, but disappointingly the strategy reads weakly on this. An effective review of the NPSs will ensure we can 'build back better' more sustainably, and towards net zero objectives, as well as reducing the number of projects being delayed by judicial review challenges,” Owen said.

Although the strategy includes funding commitments including £27 billion in 2021/22 on economic infrastructure, Hart said it remained unclear how project finance initiatives (PFI) would fit into the strategy.

“The strategy still does not herald a peace treaty with the world of project finance, which is perhaps disappointing given the time that has elapsed since former chancellor Philip Hammond read the last rites to PFI in December 2018,” Hart said.

“The strategy announces that new revenue support models ‘will be developed’ and existing models such as the regulated asset base model will be ‘applied in new areas’. The Treasury is open to new ideas from the market on future approaches but PFI and PF2 are still firmly off the agenda. It remains to be seen what shape PF3 might take – and when,” Hart said.

The government said the strategy would be followed by a series of detailed publications setting out further details on key areas of infrastructure policy, including the Construction Playbook, white papers on energy, English devolution and local recovery, a refreshed Industrial Strategy, union connectivity review and an updated national infrastructure and construction pipeline.

It will also set out new priorities for the National Infrastructure Commission, including commissioning a new study on greenhouse gas removal technologies.

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