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Autumn Statement: Include major housing projects in national infrastructure planning regime, says expert

Out-Law News | 23 Nov 2016 | 3:42 pm | 3 min. read

The UK government should incorporate major housing projects into the Nationally Significant Infrastructure Projects (NSIP) planning regime if it is serious about tackling the need to deliver more housing, an expert has said.

The change should be included in the government's planned white paper on housing, according to infrastructure planning expert Robbie Owen of Pinsent Masons, the law firm behind Out-Law.com.

Comments made by the chancellor as part of the Autumn Statement "acknowledge housing and infrastructure need to be considered together", Owen said.

Ahead of the white paper, which will be published in "due course", Philip Hammond used his speech to announce a £2.3 billion Housing Infrastructure Fund which would be used to "deliver infrastructure for up to 100,000 new homes in areas of high demand".

"This should now be reflected in the planning regime, with major housing proposals able to be taken through the Nationally Significant Infrastructure Projects planning regime," said Owen. "This is a regime that is performing well and has delivered over 60 consents since starting in 2010. Experts are repeatedly calling for this innovative reform, and we hope the government will now take the opportunity of the delay to the White Paper to reflect on it."

The NSIP regime was introduced in order to streamline the decision-making process for projects designated as being 'nationally significant'. It does not currently cover large-scale housing projects.

Chancellor Philip Hammond used his Autumn Statement speech to "prioritise additional high-value investment … that will directly contribute to raising Britain's productivity". This will be done through a new National Productivity Investment Fund for innovation and infrastructure, which will be worth £23 billion over the next five years.

Part of this funding will be allocated to transport, with details of specific projects and priorities due to be announced "over the coming weeks", according to Hammond. This will include £1.1bn for investment in English local transport networks, reducing congestion and improving public transport links. The government has also allocated £220 million to tackle 'traffic pinch points' on strategic roads overseen by Highways England, £450m to trial digital signalling on the railways and £390m to further develop low emission and connected autonomous vehicles.

Hammond also backed recommendations made by the National Infrastructure Commission on improving transport links between Oxford and Cambridge, in order to improve productivity in the region and develop it into a "transformational tech corridor". The government will provide £110m to the developing East West Rail link, and £27m for a road 'expressway' between the two cities, he said.

The government also intends to invest between 1% and 1.2% of GDP annually from 2020 on economic infrastructure, and has asked the National Infrastructure Commission to base its recommendations on the UK's infrastructure needs on this level of investment, Hammond said.

"The clear long-term support for the work of the National Infrastructure Commission will help to ensure that the large amounts of public funding promised for infrastructure will be spent in the right way and for the benefit of the whole of the UK," Owen said.

However, the speech was light on any suggestions as to how to encourage private investment in infrastructure, particularly by insurers and pension funds, according to infrastructure law expert Jonathan Hart of Pinsent Masons. These institutional investors are currently "either overheating the domestic secondary market or investing overseas", Hart said.

"There had been previous mention that the cobwebs would be blown off the Treasury Guarantee Scheme, but there were no specific announcements on how this might be used in future – possibly a reflection of the paucity of projects that are there to be guaranteed," he said.

"The UK once led the world at looking at innovative approaches to funding infrastructure investments. The UK institutional funds have indicated a willingness to invest - but there still does not appear to be any appetite as to looking anew at this. If not now, then when?" he said.

The UK Guarantees scheme was introduced to make it easier for major infrastructure projects to obtain access to private finance. The scheme will now run until at least 2026, according to today's announcement.

Infrastructure law expert Richard Laudy of Pinsent Masons said that although the chancellor's commitments to infrastructure spending were good news for the UK, the government would soon have to "tackle questions dodged by previous administrations, answering how it will finance its borrowings".

"Taxes, tolling, asset sales, pricing and other innovative methods should all be on the table," he said. "But ultimately, the user pays, so the government is going to have to address some politically sensitive questions before too long."

"There is also a big question mark as to whether the infrastructure sector has the resources available to deliver on the government's promises. We are already seeing contractors unable to tender for work due to the skills gap, and so-called 'shovel ready' projects may be held back by this shortage. This will be a continuing problem in getting infrastructure built, and will no doubt be exacerbated by the potential implications of Brexit," he said.