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Amid tough economic conditions and against a backdrop of shrinking public sector budgets, David Cameron launched his National Infrastructure Plan as a key roadmap to generating economic growth.
That the Prime Minister himself launched the plan hints at the priority that government is now giving infrastructure. The report was clear about the serious challenges faced by the UK and the need to invest.
Meeting carbon reduction targets will require investment in a new energy mix while digital networks have to spread across the whole country, according to the new plan. Meeting growing demands placed on transport, water and waste systems is another priority highlighted, alongside ensuring the UK maintains and grows the intellectual capacity to lead the knowledge economy.
The report was clear that effective investment was now crucial. It raised issues about how to get the greatest value from existing assets, for example by overcoming ‘pinch points’. It also looked at the effects of transformational investment in strategic projects and the case for better analysis of how networks interact with each other.
There are a number of ways in which government intends to support this work. These include changes to the planning process, encouraging innovation and the use of new investment models such as Tax Increment Financing (TIFs). It will also review the suitability of Regulatory Asset Base (RAB) models and the possibly of expanding their usage.
ACE has previously proposed the use of similar mechanisms to bring private sector investment into key infrastructure networks.
Given the financial crisis and the risk adverse nature of investors at present, it may be necessary for the public sector to mitigate some risks associated with such investment projects. It will be interesting to see the circumstances under which Government’s targeted interventions take place. So far the criteria has been indicated to be where there are high social or environmental costs, high risks associated with the investment, and where the infrastructure is in the wider national interest.
Industry has stressed the importance of infrastructure in both increasing the UK’s economic growth potential while improving our international competitiveness. The importance of the National Infrastructure Plan should be stressed given the scale of the challenges ahead in meeting its aims.
The Transport Infrastructure Cuts Survey, carried out on behalf of the Association for Consultancy and Engineering (ACE) and the Civil Engineering Contractors Association (CECA), showed that 77% of firms questioned believe they need access to effective and efficient transport links to grow over the coming three years. The survey revealed that two in three firms believe further cuts in transport infrastructure investment will damage their prospects over the next three years.
The National Infrastructure Plan, like the comprehensive spending review, also reiterates the government’s commitment to green technologies and carbon reduction. It is hoped that the establishment of a Green Infrastructure Bank, feed in tariffs, and the Green Deal should help the UK to meet its carbon reduction commitments.
Looking forward, the National Infrastructure Plan outlines a number of initiatives and consultations that are taking place. It is hoped this should help provide a roadmap and a degree of transparency to these processes. This will be key to strengthening private sector confidence.
However, for the National Infrastructure Plan to be a success it must be a live document, reviewed and updated on a regular basis. Other areas of public policy – such as planning, investment, employment and education – should also be aligned to support delivery of the plan.
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