The National Infrastructure Strategy: a plan for recovery

In November 2020, the Prime Minister laid out his Ten Point Plan (Plan) (endnote 1) for a 'green industrial revolution' which has now been followed by publication of the National Infrastructure Strategy (NIS) (endnote 2), which focuses on 'economic' or 'networked infrastructure': energy, transport, water, waste, flood risk management and digital communications. In outlining how the Plan will be delivered the NIS goes further and sets out a step change in UK infrastructure policy and the intention to 'significantly shift spending to the regions and nations of the UK', in the period covered by the strategy, (five years). The Government intends to update its NIS every five years in response to future National Infrastructure Assessments.

The NIS is structured around delivering the following key ambitions:

• levelling up and strengthening the Union
• putting the UK on the path to meeting its net zero emissions target by 2050
• supporting private investment; and
• accelerating and improving delivery, and as a delivery plan the NIS also signposts further reforms to project delivery.

The summer saw over £8bn of capital investment in infrastructure brought forward and the Government has announced that it is setting up a new national, North of England headquartered, infrastructure bank to co-invest with private-sector partners, which will also be available to metro mayors and local authorities. 

The Government sees the NIS as key to the UK's post-COVID recovery and rebuilding the economy. Together the Spending Review and NIS promise investment of £27bn in economic infrastructure in 21/22, plus longer-term settlements for key infrastructure programmes, for strategic roads, rail, broadband and flood defences.

The Treasury is strongly encouraging all government departments and their agencies to progress approved and funded projects into procurement and contract without delay (subject to good project discipline), and the NIS promises publication by May 2021 of an update to the National Infrastructure and Construction Pipeline. 

Delivering infrastructure

Effective delivery of infrastructure is critical to the success of the Government's strategy. Over the summer the Treasury led 'Project Speed' reviewed the infrastructure project life cycle to identify potential improvements. 

The NIS states that as a result of the Project the Government is establishing a National Infrastructure Planning Reform Programme to refresh how the NSIP regime operates, making it more effective and bringing government departments together to deliver more certainty in the process and better and faster outcomes. The NIS states that the programme will:

• set an ambition to cut timescales by up to 50% for some projects entering the system from September 2023
• establish a project "acceleration team" of planning experts to accelerate infrastructure projects through the system; and
• monitor the performance of the NSIP regime, coordinate with relevant departments on the need for a review of their National Policy Statements (NPSs) and ensure effective engagement with infrastructure departments, statutory consultees and the Planning Inspectorate and industry.

The Government is under pressure to review the NPSs following proceedings which were launched in March 2020. The Secretary of State subsequently took a provisional (not a formal decision), that the energy NPSs should be reviewed but rejected the proposal to partially suspend the energy NPSs. The NIS suggests that the Government may be looking to review all NPSs.

The NIS states that by May 2021 the Infrastructure and Projects Authority (IPA) will publish 'Transforming Infrastructure Performance' providing more detail to industry and partners on the roadmap for delivering infrastructure, building upon the measures outlined in the NIS and the Construction Playbook (8 December 2020). The NIS also reveals that the Government will be developing a national underground assets register.

Next steps

The NIS also includes a list of related publications that the Government plans to release over the next twelve months setting out further details on key areas of infrastructure policy. Taken together, the documents will set out the full scope and scale of its ambitions to level-up the country, decarbonise the economy, and revolutionise how the UK funds and delivers infrastructure. Further awaited Government strategy and policy is summarised below.

Decarbonising the economy

The NIS states that the Government expects around 65% of electricity generated in GB to come from renewable sources by 2030, but it also notes that this is not a strict renewables target, given the need to ensure that generation can be brought forward sustainably and at least cost to consumers. Further publications include:

• Energy White Paper will set out plans for onshore networks, including plans to legislate to introduce competition. It will set out the Government’s approach on the overall governance of the system. The NIS states that the long-term role and organisational structure for the Electricity System Operator (ESO) will be reviewed
• Government response to its consultation on a nuclear Regulated Asset Base (RAB). The NIS states that, alongside considering the RAB model, the Government will also continue to consider the potential role of government finance during construction, provided there is clear value for money for consumers and taxpayers
• Net Zero Review will report by May 2021 setting out how Government intends to approach distributional issues and who will bear the costs of the transition
• Industrial Decarbonisation Strategy by November 2021, setting out new business models for industry carbon capture and hydrogen to enable private sector capital investment
• Offshore Transmission Network Review which will report in 2021 to set out strategy to connect offshore wind in a clean and cost-effective way. The Spending Review and NIS confirmed investment of £160m to upgrade UK ports and manufacturing facilities to expand the share of generation from renewables and commitment to support the development of floating offshore wind
• Hydrogen strategy by November 2021 including consultation on new business models to support these projects. Government aims to finalise hydrogen business models in 2022 and for industry to complete testing in 2023 to allow up to 20% blending of hydrogen into the gas distribution grid for all homes on the gas grid and to begin hydrogen heating trials in a local neighbourhood. By 2025 it hopes a large village hydrogen heating trial may begin and to set out plans for a possible pilot hydrogen town before 2030
• Transport Decarbonisation Plan by May 2021. A cross-modal approach to decarbonising the entire transport system; it will set out an ambitious pathway to deliver transport’s contribution to carbon budgets and meet net zero by 2050. The Government will also publish a Green Paper on the UK’s post EU emissions regulations and the car and van phase out dates, as well as launch a consultation on the phase out of new diesel HGVs
• Electric Vehicle Charging Infrastructure Strategy by November 2021. The NIS states that the response is promised soon, together with regulations next year on requiring all new non-residential properties with more than 10 parking spaces to have at least one charge point and cable routes for a further one in five spaces. The NIS also confirms that there will be further consultations before the end of 2020 with a view to regulation to improve the consumer experience at public charge points
• Heat and Buildings Strategy by November 2021. In advance of this BEIS has launched a consultation on the design of the Green Heat Network Fund (GHNF); the capital grant programme to stimulate the growth of low-carbon heat networks. The funding, (subject to approval), is expected to open for applications in April 2022 and is anticipated to run for three years, to 2025.

Levelling up the whole of the UK

The NIS also confirms that the HM Treasury Green Book review process has been updated to support levelling-up in decision making. In particular, options will be assessed on whether they deliver relevant policy objectives e.g. the regeneration of a particular place. Options which fail to demonstrate delivery against Government policy objectives will not be considered value for money and will not progress to shortlisting stage. Further Government documents and policy include:

• The Freeports bidding prospectus was published on 16 November 2020. A minimum of 10 Freeports will be delivered and successful bidders will be announced in Spring 2021, with the first Freeports designated in late 2021. Freeports will enjoy a combination of tariff benefits, tax incentives, regeneration funding and local planning measures
• The Towns Fund prospectus was issued on 1 November 2020. The first seven Town Deals were agreed in October 2020 and the NIS confirms that further successful towns will be announced over the coming months with the Government's intention to revitalise over 100 town centres and high streets in England
• English Devolution and Local Recovery White Paper by November 2021
• The Integrated Rail Plan by February 2021. The NIS states that it will ensure that Phase 2b of HS2, Northern Powerhouse Rail and other planned rail investments in the North and Midlands are scoped and delivered in an integrated way
• A Cross-modal Freight Strategy in 2021
• Union Connectivity Review by February 2021. The NIS states this will provide recommendations on improving connections and any additional Government investment in infrastructure
• 5G Supply Chain Diversification Strategy in 2021
• Designation of the new National Parks and AONBs to commence in 2021. The Government's intention is to initiate 10 long-term Landscape Recovery projects between 2022-2024. The Spending Review announced and doubling of the Green Recovery Challenge Fund to £80m.

In addition to the further awaited strategies and policies listed above the NIS has signposted the Government's intention to publish by the end of 2021 an Industrial Decarbonisation Strategy and a refreshed Industrial Strategy.

Conclusion

With the Spending Review delivering funding for the priority areas corresponding to the Government's 'Ten Point Plan' and the NIS providing an 'implementation plan', the direction of travel towards the Government's net zero target and a plan for the recovery of the UK economy in the wake of the pandemic has been set as a roadmap.

The effective delivery of infrastructure is critical to the success of the Government's strategy. The announcement of the establishment of a National Infrastructure Reform Programme to refresh the operation of the Nationally Significant Infrastructure Projects (NSIP) regime is welcome. 

The NSIP process is embedded in statute and to comply with the current regime is both time and resource intensive. It is to be welcomed that he Government is focusing on lifting barriers and a move to greater collaboration is significant and positive. The NIS has signposted that the Government intends to publish a National Strategy for Disabled People which will also have implications for the delivery of infrastructure projects, particularly in the transport sector. It is important to ensure that stakeholders continue to be able to engage in the process and all statutory bodies have the resources to be able to do so.

_____________

(1) 10 Point Plan: https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution

(2) National Infrastructure Strategy:https://www.gov.uk/government/publications/national-infrastructure-strategy