Senior civil servants this week pledged to remove planning obstacles to new major infrastructure projects by the end of the year as it published its first broad commitment to a long term infrastructure investment plan.
Industry concern had been growing that the government’s plan to review spending and devolve planning powers, as well as abolish the Infrastructure Planning Commission (IPC), could halt infrastructure projects.
But senior government officials declared that this week’s publication of the National Infrastructure Plan 2010 by the Treasury and Infrastructure UK (IUK) would pave the way for new projects to be approved by the New Year.
The document commits to enabling £200bn to be invested in infrastructure over the next five years and attempts to identify and unlock potential for private investment.
Treasury commercial secretary and infrastructure minister Lord Sassoon said the plan signalled “a new approach at the heart of government to make sure that [this £200bn spend] gets driven forward”.
IUK this week also announced that the Cabinet’s economic affairs committee, chaired by chancellor George Osborne, would take on the coordination of infrastructure planning, prioritisation and policy development across government.
This will ensure that while some planning decisions are devolved to local government through the Decentralisation and Localism Bill, decisions on nationally significant projects will be made at the highest level of government. This is despite the scrapping of the IPC.
IUK chief executive James Stewart said that the plan had received the backing of the Cabinet Office and the Department for Business, Innovation and Skills. This meant there would now be “precise clarity” on planning approvals for major projects by the New Year.
“The plan represents a baseline from which progress can be measured,” said IUK chairman Paul Skinner. “One of the key roles for IUK is to track progress so that all parts of the government are aware of where there are any slippages.”
Stewart added that this was a working document that would be updated at least annually for the next two years. The aim is for updates to reveal detailed plans for the longer term beyond the initial five year programme.
The government’s hope is that by providing a broad commitment to infrastructure, it will create a secure environment for private and international investment in the UK.
Sassoon, who attended an exclusive ICE infrastructure seminar after Skinner and Stewarts’ Treasury press conference on Tuesday, was keen to stress that public investment in infrastructure would still flow where it was justified, according to criteria set out in the document.
This hierarchy for investment will be based on the following: maintenance and smarter use of assets; targeted action to tackle network stress points and develop networks; and transformational large scale capital projects.
The government is understood to be warming to the idea of investing public money where appropriate. This was underscored by the announcement last week that saw rail investment - including Crossrail and Tube upgrades - protected.
Sassoon said that the single big change in the spending review following June’s emergency Budget was a £9bn boost to infrastructure funding.
In future, much greater emphasis will be placed on other sources of investment as well as finding ways to reduce the high costs associated with building infrastructure in the UK. IUK is studying the costs of civils work in the UK with the intention of driving them down. This will provide greater certainty of return on investment for investors. A full report is due in December.
The government is keen to pursue what the report says are “major sources” of investment and singles out sovereign wealth funds. Further evidence that high level government is focused on an infrastructure plan came from this week’s Qatari state visit. The Middle East has long been a prime region for sovereign wealth.
ICE director general Tom Foulkes said the plan “is a victory in itself” and said it demonstrated “strong political commitment”.
The National Infrastructure Plan sets out a series of project assessment reforms:
- Infrastructure should be assessed against a hierarchy of criteria: whether best use of existing assets is being made; whether action is targeted at network stress points; and whether large scale projects are transformational and part of a clear, affordable long term strategy
- IUK will also investigate the potential to extend the regulatory asset base model (as is used in the water industry) to transport, waste and flood management has been considered
- The plan also makes moves towards finding ways of cutting project costs by reducing risks transferred to the private sector