2 December 20206 minute read

An introduction and summary of the key points

The government has published its long-awaited National Infrastructure Strategy (NIS), announcing plans to “build back better, to create world-class infrastructure across the whole UK, and to transform people’s lives for decades to come.”

Published in the midst of the COVID-19 pandemic, the NIS seeks to balance the government’s long-term goals with the short-term imperative of rebuilding the economy following the COVID-19 pandemic – it recognises a need to invest in all types of infrastructure as a means of underpinning economic recovery and growth.

Through the NIS, the government intends to address the long-term issues that have stifled UK infrastructure, such as ‘stop-start’ public investment, insufficient funding for regions outside of London, slow adoption of new technology, policy uncertainty that undermines private investment, and project delivery plagued by delays and cost overruns. It would also help the UK meet its target of net zero carbon emissions by 2050, boost productivity across the country, support private investment, and accelerate project delivery.

The NIS is stated to be the first decisive step towards delivering the UK’s infrastructure ambitions and through a series of five chapters explores the government’s vision to:

  • unite the UK with thriving communities, cities, regions and nations;
  • create greener and more beautiful places;
  • ensure the UK is a world leader in new technologies;
  • create a stable and robust regulatory and delivery system.

The NIS aims to provide investors with clarity over the government’s plans, inspiring confidence in the delivery of upgrades and projects needed across the country. Furthermore, it aims to accelerate and improve delivery of infrastructure projects by speeding up the planning system, improving the way projects are chosen, procured and delivered, and greater use of cutting-edge construction technology. This approach is stated to be underpinned by high levels of government investment, with record levels of investment for the railways, strategic roads, broadband networks and flood defences.

During December, we will explore the highlights and key findings in each of the five Chapters.

National Infrastructure Strategy: Chapter 1 – Recovery and Rebuilding the Economy

Chapter 1 of the NIS focuses on how infrastructure can be used as a means of driving economic growth and recovery in the wake of COVID-19.

The NIS recognises the unprecedented impact of the pandemic and highlights the important role which infrastructure can play in the recovery effort – creating and maintaining jobs in the short term, whilst creating conditions for long-term sustainable growth.

To that end, the government has promised GBP27 billion of investment in economic infrastructure in 2020 – 2021. This is in addition to the GBP8.6 billion it has already provided in 2020 as capital investment in infrastructure, decarbonisation and maintenance projects.

The pandemic has profoundly impacted how people use infrastructure and, whilst a number of these impacts are predicted to be temporary, others may be set to endure (such as working from home) and the government has promised to work closely with industry, consumers and the National Infrastructure Commission to understand and respond to demand trends following the pandemic. Transport modelling is expected to reflect a potentially new long term trend in usage.

Infrastructure and Public Health

The pandemic has highlighted the importance of overall public health and the NIS states that infrastructure can be a key driver in this respect. Investment in active travel such as cycling and walking can tackle obesity and decarbonise the economy whilst reducing congestion.

The NIS also recognises the critical role that local green spaces have played this year both in terms of our collective mental and physical wellbeing. The government is developing a framework to show what good green infrastructure looks like.

Infrastructure and the Recovery: the 2020 Spending Review

As noted above, the Spending Review announced a GBP27 billion investment towards transport, energy and digital communications next year. In total, the Review delivers GBP100 billion investment, with plans to invest over GBP600 billion over the next five years – the highest sustained levels of public sector net investment as a proportion of GDP since the late 1970s. The Spending Review also announced longer-term budgets for programmes such as HS2, strategic roads, flood defences and broadband.

In addition to public sector investment, the NIS also acknowledges the critical role the private sector has to play in infrastructure delivery and provides how the government will support private sector investment. The NIS is also said to deliver on the Prime Minister’s Ten Point Plan for a Green Industrial Revolution, which is intended to mobilise billions of pounds of private investment.

The National Infrastructure Commission’s Fiscal Remit

The National Infrastructure Commission’s (NIC’s) Charter commits the government to setting a binding fiscal remit to ensure the NIC’s recommendations remain affordable. The fiscal remit applies to transport, energy, flood risk management, digital communications, water and waste. It is designed to ensure the NIC prioritise and explain their recommendations.

Given economic uncertainty, the remit will not be definitively updated at this time, with a formal review to follow next year.

Delivering on these Commitments

The NIS sees the construction industry as the key both to delivering on its commitments in the NIS and to the general economic recovery of the UK. The industry continues to face unprecedented challenges this year and the government’s aim is to keep the industry moving so it can emerge from the pandemic with the capacity to deliver on the NIS. The government seeks to achieve this through:

  • progressive and structured investment to eliminate the “peaks and troughs which have proved destabilising for the supply chain in the past”;
  • a varied pipeline in terms of the size and location of projects, resulting in commercial opportunities to contractors of all sizes and capacities;
  • new investment at smaller schemes (alongside the major projects) to upgrade existing infrastructure quickly and efficiently;
  • encouraging local authorities to progress funded projects in their areas as soon as possible;
  • using its own “weight as a major construction client” to transform and modernise the industry through the publication and implementation of the construction playbook.

If you have any questions about the potential implications of the NIS for your business, please contact Ian Graves, Legal Director or Pieter Claussen, Associate, members of our UK Planning and Land Use team and UK Infrastructure, Construction & Transport sector group.

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