Out-Law / Your Daily Need-To-Know

UK sets out £650bn infrastructure pipeline

Out-Law News | 15 Sep 2021 | 1:11 pm | 2 min. read

Up to £650 billion of public and private sector money could be spent on UK priority infrastructure projects over the next 10 years, according to plans published by the government.

The latest National Infrastructure and Construction Pipeline includes details of £31bn worth of planned procurements of social and economic infrastructure, to take place by the end of the 2021-22 financial year. The government said that this commitment would “help suppliers make business critical decisions as we emerge from the coronavirus crisis”.

A separate paper, published alongside the pipeline, sets out the government’s vision for future infrastructure investment and delivery. The ‘roadmap’ on transforming infrastructure performance proposes maximising social benefit and value through better use of data and digital technology and improved delivery models.

Infrastructure expect Jonathan Hart of Pinsent Masons, the law firm behind Out-Law, welcomed the announcements.

“Government project pipelines have been fraught with problems since the earliest days of the National Infrastructure Commission – what to include, what not to include, what is purely aspirational and, in a few cases, what has already been procured,” he said.

Hart Jonathan

Jonathan Hart

Partner

The emphasis on technology chimes with the government’s Construction Playbook, which is slowly starting to make itself felt on major procurements

“This announcement is welcome, however. It helps bring together both economic and social infrastructure, as well as highlighting the crucial significance that technology is going to play in project delivery and the need to consider appropriate contracting methodologies. This chimes with the government’s Construction Playbook, published at the end of the last year, which is slowly starting to make itself felt on major procurements,” he said.

However, Hart added: “These are eye-wateringly large numbers: how this fits with current market constraints and the sometimes glacial pace of tendering processes remains to be seen”.

Analysis of the planned procurements for 2021-22 shows a rough split of around 20% ‘social’ infrastructure, which includes education, health and justice projects; and around 80% ‘economic’ infrastructure, including transport, energy and digital infrastructure. Education, with 165 planned projects worth an estimated £2.5bn; justice, with 23 planned projects and programmes worth an estimated £2.5-£2.7bn; and transport, with 132 planned projects and programmes worth an estimated £14.8-£23.6bn, are the sectors with the most significant planned spend in the next 12 months.

The government expects to procure around £200bn worth of work up to 2024-25, according to the pipeline.

For the first time, the government’s Infrastructure and Projects Authority (IPA) has included an estimate of the workforce required to deliver on the plans in the pipeline: an average of 425,000 workers across infrastructure and construction annually up to 2024-25. This workforce will either need to be brought into the infrastructure market through apprenticeships, graduates and recruitment from other industries, and by retraining and upskilling the existing workforce. The IPA intends to provide regular updates on workforce requirements through each future iteration of the pipeline, to enable the industry to plan to meet demand.

Friel Anne-Marie July_2019

Anne-Marie Friel

Partner

The infrastructure sector needs to urgently pull together to ensure that the carbon impact of all production, processes and operation is understood across the whole supply chain

The government is committed to innovating, improving efficiencies and reducing emissions in line with the 2050 ‘net zero’ target throughout, including through the use of modern methods of construction (MMC). Of the 528 future projects, programmes and other investments included within the ‘investment’ section of the pipeline, 143 will make best use of MMC, ranging from digital design to offsite and volumetric construction.

Anne-Marie Friel of Pinsent Masons, who specialises in helping infrastructure firms address climate risk, said: “The commitment to modern methods of construction as a key component in the UK’s net zero journey is reassuring, but the question remains as to whether or not the commitment is significant enough to really move the dial”.

“The need to understand the true carbon ‘footprint’ of an asset across its life cycle remains imperative and the sector needs to urgently pull together to ensure that the carbon impact of all production, processes and operation is understood across the whole supply chain, relying on real-time data based decision making,” she said.