UK government consults on 'governance and structure' of National Infrastructure Commission

Out-Law News | 08 Jan 2016 | 4:54 pm | 3 min. read

The UK government has published its plans for putting the independent National Infrastructure Commission (NIC) on a statutory footing in a way that will ensure its "independence and credibility".

It is consulting on the commission's proposed governance, structure and operation until 17 March. The commission, which is being chaired on an interim basis by former Labour peer Lord Adonis, has been working in a shadow form on three priority projects since 5 October, and is due to report on its findings by the Budget in March.

Infrastructure planning expert Robbie Owen of Pinsent Masons, the law firm behind, urged the government to be "ambitious" in its plans for the new body, which he said had the potential to transform the delivery of the UK's infrastructure needs.

"We need to mirror the success seen in countries such as Australia and develop an ambitious, long-term, comprehensive plan for addressing these longstanding issues if we are truly going to tackle and solve the question or our ailing infrastructure head on and address how to pay for the dramatic upgrades and improvements required," he said. "We lack a coherent, evidence-based decision making process which is needed for the pipeline of large-scale projects widely accepted as critical in the UK."

"A culture change is required and the NIC could be the driver behind that change. But we now need to see the nuts and bolts of how the NIC will work, how it will interact with the government and what guidance it will get from government in terms of affordability constraints. Investors and developers alike will be looking to the government to make clear the dynamic between the NIC, parliament and industry stakeholders and what the government will do with the commission's outputs," he said.

The NIC was set up to take a long-term look at the UK's infrastructure needs and to provide independent advice to ministers and parliament. Once fully established, it will be required to publish a National Infrastructure Assessment (NIA) in every parliament setting out its analysis of the UK's infrastructure needs over the next 10 to 30 years. The government will be required to respond formally to the recommendations of the commission.

The commission will also be asked to carry out specific studies into pressing and significant infrastructure challenges. In November, it began a public 'call for evidence' which it will draw upon when reporting to the Treasury on its three initial priority areas of work: transport connectivity in the north of England, London transport and balancing electricity demand and supply.

The government's preferred approach is to establish the NIC as a non-departmental public body (NDPB) through primary legislation. This structure would ensure that the NIC can operate independent of government in the pursuit of its duties, while remaining accountable to the Treasury for its performance and its allocation and use of public funds. As a corporate body independent of government, the NIC would take its own decisions on staffing and recruitment and would be responsible for managing its own spending, which it would be required to account for in an annual report. Commissioner and chair appointments would, however, be the responsibility of the chancellor of the exchequer.

Production of a regular NIA would be a "primary function" of the new commission, with the requirement to do so set out in the legislation, according to the consultation. The legislation would also enable the commission to examine the most "pressing and significant" infrastructure challenges under terms of reference set by the government. The government also intends to legislate that it must lay NIAs before parliament, and to place a duty on the Treasury to respond on behalf of the government within a specific timeframe.

Any recommendations accepted by the government would become 'endorsed recommendations', and would be considered to be government policy, according to the consultation. However, responsibility for taking decisions on what infrastructure needs to be built and for delivering that infrastructure would remain with the government or relevant regulator. Endorsed recommendations would not be legally binding on the economic regulators, such as Ofcom and Ofgem. However, the legislation would place an obligation on these regulators to "have regard" to endorsed recommendations alongside their other duties and interests.

Robbie Owen said that the question of how the government would get from the commission's recommendations to a clear pipeline of projects was a "crucial" one.

"The long term, strategic approach to infrastructure planning is laudable, but the question remains: how is the UK going to pay for the infrastructure needed to tackle the deficit?" he said. "Investors crave predictability and certainty, and seeing the details as to how the commission will work in practice will be an important foundation for that."