In her pre-adjournment statement Rachel Reeves announced cancellations and delays to major infrastructure investments like the A303, A27, the Johnson 40 new hospitals programme and local rail reinstatement projects. But the UK government is also making significant reforms to the frameworks, institutions, and processes for delivering new schemes. Might these allow the country to deliver more and better infrastructure at lower cost? In this Espresso Shot episode Mike and David discuss what these changes might mean for local and regional leadership teams.
Are we moving from tactical, pork barrel UK infrastructure funding to strategic planning and management?
Although the optics of cancelling capital investment to shore up short-term current spending pressures seem all too familiar, in our view the infrastructure cancellations might be thought of as calling time on schemes with weak business cases that were going nowhere fast, or had already, de facto, been unfunded by the outgoing Conservative government. And it’s easy to forget that the first moves of the incoming government were actually to green-light several major renewable energy projects. But arguably the focus of ministerial energy has not been on individual schemes – rather it has been on changing the institutional architecture that prioritises, plans, funds, and signs off on new infrastructure.
These reforms have major implications to which Combined Authorities (CAs) and local authorities (LAs) need to respond. So far, they include a new National Planning Policy Framework (NPPF) and the removal of an in-effect ban on new onshore wind farms; a new Standard Model for assessing housing need and a requirement for planning authorities to demonstrate 5-year housing land supply; extending the use of call-in powers by the Secretary of State; and requirements on LAs to identify strategic sites for uses such as energy generation from renewables, laboratories, gigafactories, and data centres.
The merger of the National Infrastructure Commission (NIC) and the Infrastructure and Projects Authority (IPA) into a new National Infrastructure and Service Transformation Authority (NISTA) was announced by Labour at UKREIIF in May and looks set to be implemented. This will provide a body bringing together national advice and support for strategic planning, delivery management and procurement of major infrastructure projects.
The National Wealth Fund, rooted in increased capitalisation of the UK Infrastructure Bank (UKIB), provides the basis for new channels and mechanisms of public infrastructure financing and leveraging in private and institutional investment.
Taken together, these changes mark a signature shift from the increasingly project-by-project tactical approach of the previous government, and the political character of location decisions in infrastructure investment.
How might CAs, LAs and local partners make the most of this new context?
The changes announced are a catalyst to ensuring that CAs have strategic infrastructure plans and strategies in place, populated with a pipeline of credible deliverable projects. This is a big change from what had become an opportunistic scheme-by-scheme bidding treadmill in recent years – both in terms of serious strategic planning and in infrastructure management capacity and capabilities.
They need to be able to engage with and build longer term strategic relationships with a wider range of funding and enabling role players – from Government to NISTA to UKIB, and to institutional investors. And they should explore non-traditional delivery models, from TIF to international models of value-capture and hypothecated funding regimes.
These agendas are deep, broad, and sit on top of already very stretched CA and LA teams – especially for those that are new or yet to be established. However, moving from tactical pork barrel infrastructure priorities to strategic agendas is essential for the future of robust, resilient and developmental LED and placemaking.
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