Out-Law News 2 min. read

UK needs assessment recognises 'interdependencies' between different infrastructure classes

The UK must take a strategic, long-term approach to planning for future infrastructure, recognising the "interdependencies" between the likes of energy, transport and digital projects, according to an independent panel of experts.

The National Needs Assessment (NNA) was produced by Sir John Armitt of the Institute of Civil Engineers (ICE) with contributions from Atkins, KPMG, the Infrastructure Transitions Research Consortium (ITRC) at the University of Oxford and Pinsent Masons, the law firm behind Out-Law.com. The report makes a number of recommendations intended to guide the government-backed National Infrastructure Commission (NIC) as it produces its own National Infrastructure Assessment (NIA) for the government, planned for 2018.

The report concludes that government policies for infrastructure, particularly energy, need to "transcend political cycles". As an example, it cited energy companies that had been discouraged from investing in carbon capture and solar photovoltaic (PV) projects due to uncertainty over future government policy.

The conclusions of the report are based on 15 months of engagement with industry, investors, politicians and environmental, legal and professional bodies. The authors received 50 formal responses during the consultation process.

"We project that the UK population is set to reach 75 million by 2050, and with that growth there will be an increasing and changing demand for infrastructure services," said Armitt, who was recently appointed interim deputy chair of the NIC. "Users of infrastructure are increasingly conscious and vocal about the everyday challenges presented by these demands."

"This assessment is not a list of projects, and the UK cannot afford to spend its way out of challenges by building more capacity. Technology, supported by the right policies, will enable new and existing infrastructure to be used much more efficiently. The country needs a clear strategy, management and establishment of critical standards for our infrastructure to sustain and improve quality of life and business competitiveness in a modern and evolving world. If we don't, we will lose out on many opportunities, particularly in a post-Brexit economy," he said.

According to the report, stable energy supply underpins the future of all infrastructure development. With this in mind, it recommends that the government commit as a matter of priority to a plan for low carbon electricity generation, which ensures security of supply through to at least 2035. This should feature a diverse generation mix based on nuclear, renewables, gas and interconnectors, and set out expected generation for each of these components, in order to create a stable environment for the long-term investment that will be needed, according to the report.

Beyond this, the report calls for an "integrated, cross-sectoral approach" to infrastructure policy, which takes into account the interconnected nature of the UK's infrastructure needs. It concludes that a "piecemeal" approach simply will not work given transport's dependence on energy; energy's dependence on transport and water; and the dependence of "all infrastructure" on digital connectivity. Similarly, housing and supporting infrastructure must be planned together to "create thriving communities and spread economic growth", according to the report.

"The scenarios modelled show energy and transport have the largest interdependencies," said Armitt. "For example the electrification in transport that is needed to meet decarbonisation targets will have a direct impact on our electricity consumption. In fact, the research shows without management electricity demand could almost double - government needs to address this with a balanced policy."

The report also calls for infrastructure funding models to "evolve", recognising that technological innovation means that people are now more used to paying for infrastructure services in different ways. "Demand management", for example through road charging, rather than building new infrastructure will be of increasing importance; as without it "the benefits of new capacity will be rapidly drowned out by increased demand", according to the report.

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