19 October 2020: How can the UK deliver on its ambitious infrastructure plans without a national infrastructure strategy, a comprehensive multi-year spending review, or an infrastructure investment bank?
It seems that everyone agrees that investing more in infrastructure is critical to the future prosperity of the UK, but how do we actually deliver those ambitions on the ground?
After decades of underinvestment that has seen the UK fall behind many other developed, and even some developing countries, there is a great deal of consensus that a substantial amount of new investment is needed in both economic and social infrastructure right across the country. An investment-led recovery is also increasingly seen as essential to repair the economic damage caused by the coronavirus pandemic.
The UK does not score that well with only one relatively short high-speed railway, low broadband speeds across most of the country, severely congested roads, poor public transport networks outside London and the South East, a collapsing nuclear energy programme, underinvestment in hospitals, schools and care homes, and a failure to deliver enough houses. The fading glory of the on-time and on-budget delivery of the 2012 Olympics seems a long-time ago, as does the admittedly controversial PFI investment boom of the early 2000s.
A successful infrastructure programme requires many elements, starting with a clear national strategy setting out what needs to be built and how. Budget allocations for publicly funded infrastructure and a financial framework for privately funded infrastructure need to be in place well in advance. Financial institutions are required to provide finance for major infrastructure projects and to the businesses constructing them. An efficient planning system is needed that balances the economic benefits of building new assets with other interests.
Despite the enthusiasm for new investment from across the political spectrum, many of the building blocks are not yet in place. The National Infrastructure Strategy has been delayed several times and is still not published. The coronavirus pandemic has delayed the planned three-year Spending Review by yet another year, with a more limited one-year Spending Round expected this November instead. Similarly, we are still awaiting the outcome of the Infrastructure Finance Review that is expected to provide a new financial framework for private sector participation in infrastructure projects, as well as an anticipated UK successor to the European Investment Bank (EIB).
Despite this, there are some bright spots. Behind the scenes, there is a major upgrade underway of the UK’s energy transmission and distribution networks that is seeing tens of billions invested in improving the resilience and flexibility of the UK’s energy plumbing. And the UK has become a world leader in offshore wind power, with decisions taken a decade ago starting to bear fruit.
How can the UK deliver on ambitious plans to achieve carbon-neutrality while ensuring a reliable and secure energy supply, become a digital superpower and ‘level up’ deprived regions all at the same time?
This is one of the more important debates we need to have – after all the very future of the country is at stake.
Join Katie Black, Director for Policy at the National Infrastructure Commission, Melanie Onn, Deputy Chief Executive for Renewable UK, Iain Wright, Director for Business and Industrial Strategy at ICAEW and Alison Ring, Director for Public Sector at ICAEW, to discuss the UK’s infrastructure plans at an ICAEW webinar on Thursday 22 October at 11am.
To read ICAEW’s submission to the Infrastructure Finance Review click here.