Out-Law News | 05 Sep 2013 | 5:20 pm | 3 min. read
Sir John Armitt, the former chairman of the Olympic Delivery Authority, has recommended the creation of a National Infrastructure Commission (36-page / 423KB PDF) to set clear priorities for UK infrastructure investment over the next 25-30 years. In his report, commissioned last year by the Labour Party he said that "cross-party political consensus" was needed to encourage investment in long-term transport, energy, telecommunications and flood defence projects.
"Over the last 40 years UK infrastructure has fallen behind the rest of the world and is increasingly struggling to cope with the demands we make of it," Armitt said. "An infrastructure fit for the future must now be a national priority alongside education and health and a new independent National Infrastructure Commission is a way of delivering this improvement with the vital support of the public and politicians of all parties.
"London 2012 proved we are capable of planning and delivering complex and innovative infrastructure projects with local and national cross-party support. We did it right for the Games and now we need to apply the lessons we've learned to other areas and services we need to improve to cope with the challenges ahead," he said.
The independent commission proposed in the report would be set up by an Act of Parliament, and would produce a National Infrastructure Assessment to be presented to Parliament once every ten years. This assessment would look at the UK's infrastructure needs over the next 25-30 years, with a particular focus on 'nationally significant' infrastructure as defined by the 2008 Planning Act. In developing its conclusions, the commission would consider economic growth forecasts, population trends and technological changes, as well as environmental issues and the regulatory requirements of each sector.
Once completed, the National Infrastructure Assessment would be submitted to the Chancellor, who would have a statutory obligation to present it and any Government amendments to Parliament within six months. Following Parliamentary debate and approval, individual Government departments would then have to produce Sector Infrastructure Plans setting out specific schemes and projects to meet the needs identified by the commission within 12 months. These plans would include timeframes, and details of sources of funding.
A National Infrastructure Plan is currently produced annually by Infrastructure UK, the Treasury unit that deals with long-term infrastructure priorities and their funding. However, Armitt said that this work was "not strategic" and was instead "essentially a list of projects which is not built up from an evidence-based assessment of the UK's long-term needs". In addition, Infrastructure UK lacks "statutory independence" and does not have the same profile of independent bodies such as the Office of Budget Responsibility and Committee on Climate Change, he said.
The report said that successive governments had "failed to set strategic priorities around infrastructure investment", and that long-term decisions tended to be "taken in silos with little acknowledgement of the interdependencies between sectors". An example given was the current debate on high speed rail, which was taking place "independently of any assessment of options for the strategic road network". Difficulties building and sustaining cross-party consensus on major projects, lack of transparency around funding arrangements and the length of the planning process for major infrastructure were also identified.
"The experience of the past decade with High Speed One, and more recently the London 2012 Olympics, suggests that Britain has made significant strides in delivering big infrastructure more effectively," the report said. "Our failure is in reaching an evidence-based view on what needs to be delivered and then in sustaining the political and public consensus that will provide confidence to investors."
Examples of specific areas which had been affected by these difficulties included the development of UK energy policy, ongoing issues in relation to airport capacity and the delivery of major rail projects falling outside ATOC and Network Rail's existing regulatory processes, the report said.
Infrastructure law expert Graham Robinson of Pinsent Masons, the law firm behind Out-Law.com, said that although the need for greater clarity and certainty over infrastructure planning and policy was "imperative" to make the UK attractive to investors, questions remained over how the projects themselves would be funded.
"The need for planning the UK's infrastructure over a longer-term horizon, and with some degree of independent oversight, is of paramount importance to the health of the economy and ability to become more competitive," he said. "But the reality is that significant private sector investment will be needed to fund the UK's long-term infrastructure needs."
"The proposed Infrastructure Sector Plans should be accompanied by reform in the way infrastructure is funded to enable Armitt's proposals for a separate National Infrastructure Commission to be fully workable," he said.