Fourth on chancellor George Osborne’s list of responsibilities is the “delivery of infrastructure projects across the public sector and facilitating private sector investment into UK infrastructure”.
His key weapon in delivering on this responsibility is the National Infrastructure Plan, first published in October 2010 by Treasury body Infrastructure UK.
Updated annually alongside the Autumn Statement, it sets out the challenges facing UK infrastructure and the government’s strategy for tackling them. The plan contains major commitments for investment in important infrastructure projects and explains how it is attracting new private sector investment.
Osborne has a bit of breathing space ahead of the next scheduled update, giving him valuable time to work with his cabinet colleagues – and principally transport secretary Patrick McLoughlin – to make some big decisions around airport development and High Speed 2. He’ll also be anxious to press EDF to make a final investment decision on building a new nuclear power station at Hinkley Point in Somerset.
He will also use the time to give some real impetus to his Northern Powerhouse idea. Tatton MP Osborne has championed the idea of Manchester at the centre of a Northern Powerhouse to rival London as part of plans to rebalance the UK economy.
He has already said that Greater Manchester will be run by an elected mayor from 2017 as part of plans announced in November to devolve fiscal power closer to the point of spending – and, as with London, transport will be one of the largest budgets under the mayor’s control.
That is just the start of Osborne’s vision.
A City Devolution Bill will be in the Queen’s Speech later this month and North East MP James Wharton has been named minister for the Northern Powerhouse in the Department for Communities and Local Government and will take the legislation through Parliament.
And Osborne has challenged more cities to come forward and seize the opportunity to take charge of “multi-billion pound budgets”.
He said last week: “My door now is open to any other major city who wants to take this bold step into the future. I want other cities with other champions.”
Costs and benefits have already been submitted to the government for a series of proposed rail schemes worth up to £65bn across the North of England.
Infrastructure operator Network Rail and Transport for the North – the body representing major cities in the region – drew up the options in a report published in March.
“Connecting up the great cities of the North is at the heart of our plan to build a northern powerhouse,” said Osborne then. “This report has the potential to revolutionise transport in the North and we will work closely with Transport for the North to help make it a reality.”
Supporting Osborne on infrastructure are Greg Hands as new chief secretary to the Treasury and Jim O’Neill as new commercial secretary to the Treasury. O’Neill also takes specific responsibility for the Northern Powerhouse.
Hands replaces Liberal Democrat Danny Alexander, who lost his seat in the election, and takes on responsibility for public expenditure including efficiency and value for money in public service, procurement and capital investment.
And O’Neill replaces Lord Deighton, who had held the commercial secretary post since 2013.
It is a key role in the infrastructure world, as the commercial secretary has Osborne’s delegated authority to lead on the Treasury’s infrastructure commitments and takes ministerial charge of Infrastructure UK.
Osborne tweeted that the retiring Goldman Sachs Asset Management chairman O’Neill has been chosen “make devolution and the Northern Powerhouse happen”.
O’Neill is chairman of the RSA City Growth Commission, which claimed the economy has seen 5% less growth per year between 2000 and 2010 as a result of “chronic” underinvestment outside London.
It urged an overhaul of transport, housing and broadband provision and more house building.
Deighton had been popular in the role, having joined the Treasury having successfully completed his role as chief executive of the London Organising Committee of the Olympic and Paralympic Games (LOCOG), which was responsible for preparing and staging the London 2012 Games.
O’Neill will now take up the baton with Infrastructure UK and will be called into action early with the body due to unveil a National Infrastructure Plan for Skills before the summer.
The proposal was unveiled by Deighton in March. He said the skills plan was vital for successful delivery of the government’s infrastructure agenda.
“This government was the first to set out a National Infrastructure Plan to provide clarity on the pipeline of investment in major infrastructure construction. Our next challenge is to address the immediate need to develop the skills necessary which will deliver this ambitious pipeline,” he said.
A key plank of the plan will be a requirement for bidders for major government infrastructure projects to provide evidence of their commitment to developing skills. Details will be expected in the plan.
Top four items in Osborne, Hands & O’Neill’s in-trays
- Unveiling the first National Infrastructure Plan for Skills
- Setting in motion plans for an elected mayor for Greater Manchester
- Working with Department for Transport to make decisions around airport expansion in the south east and High Speed 2
- Drumming an investment decision out of EdF regarding Hinkley Point