Published alongside the Spending Review on 25 November 2020 and coming as chancellor Rishi Sunak announced the establishment of a National Infrastructure Bank to finance critical investment projects, the National Infrastructure Strategy (NIS) outlines long-term capital investment to achieve ‘a radical improvement in the quality of the UK infrastructure to help level up the country’. It is based on three central objectives: economic recovery, levelling up and strengthening the United Kingdom, and meeting the UK’s net-zero emissions target by 2050.
Labelled an ‘infrastructure revolution’, the NIS is the product of a 2018 assessment which, led by the independent National Infrastructure Commission, reviewed the country’s infrastructure requirements and afforded the government with a set of recommendations. This article outlines some of the key takeaways from the 100-page NIS document and discusses how the NIS intends to address regional imbalances.
Economic recovery
Economic disruption caused by the COVID-19 (coronavirus) pandemic has led the government to respond with an unprecedented support package, with the hope of giving a shot in the arm to market recovery. Being a traditionally key economic enabler, infrastructure investment could prove vital to maintaining jobs and securing sustainable long-term economic prospects. The Spending Review 2020 is set to deliver £100 billion total investment in 2021-22 dedicated to supporting post-pandemic economic prosperity, £27 billion of which is being used for public investment in economic infrastructure.
In addition to outlining longer-term settlements for key infrastructure programmes, including in the transport, telecommunications, flood defence, education, health, and defence markets, the NIS states how the government’s decision to high levels of investment now despite pressures presented by the coronavirus pandemic signifies a ‘commitment to end the stop-start pattern of investment that has been common in the UK in the past’. A promise of increased, accelerated and sustained infrastructure investment will be welcome news for supply chain partners looking to get spades back in the ground and keep them there for the long term.
Nationwide development
One of the main focuses of the NIS is to ‘unite and level up the UK’ by way of infrastructure development. Recognising the existence of regional inequality, including the North-South divide and the comparatively high level of capital investment in London, has prompted the government to prioritise investment in regions that have typically received less support in the past.
With a desire to create ‘regional powerhouses’ and ‘leave no community or business behind’, the NIS proposes £4.2 billion in intra-city transport settlements, helping to steer investment towards the largest city regions outside the capital; £5 billion to support a UK-wide next-generation broadband rollout and to create a Shared Rural Network to extent 4G mobile connectivity to 95% of the United Kingdom; and ‘record investment’ in strategic roads up and down the country. It has also reiterated public backing of High Speed 2 to deliver essential North-South connectivity, along with an Integrated Rail Plan to drive transformational improvements in the Midlands and the North.
The NIS also indicates a shift in the government’s thinking with regards to regional development and a consequent change in the way in which public money is allocated across the United Kingdom. Borne out from the NIS, a Union Connectivity Review is due to report by summer 2021, appraising options to improve transport links across England, Scotland, Wales, and Northern Ireland. Additionally, the UK Internal Market Bill, which was written into UK law as the UK Internal Market Act 2020 on 17 December 2020, gives the government powers to invest in infrastructure and economic development across the four UK nations.
Elsewhere, the government’s Places for Growth programme envisages 22,000 civil service roles being relocated from Whitehall by 2030, intended to address the regional imbalance in the civil service. A conscious effort to achieve social equilibrium, ensuring the backdrop for regional development is sustainable through the long term, and an aim to conjure equal opportunities across all UK regions in terms of employment and business ventures should result in a more even distribution of economic activity in years to come. According to data from the Office for National Statistics, London alone accounts for 22.8% of UK GDP compared with just 2.9% in the North East of England. In the future, the NIS should help to close this gap.
Decarbonising society
The third pillar of the government’s NIS is a commitment to infrastructure investment fundamental to delivering net-zero emissions by 2050, as previously set out in the Ten Point Plan for a Green Industrial Revolution. With the support of private investment, the public sector is aiming to transition to net zero through retrofitting the UK’s building stock; the electrification of vehicles; the advancement of new technologies, such as carbon capture; and investment in low-carbon infrastructure to support the UK’s commitment to the Paris Agreement.
Leading the charge towards a net-zero economy, key measures outlined in the NIS include approximately £1.3 billion of investment in charging infrastructure, to accelerate the mass adoption of electric vehicles; £5.2 billion by 2027 to better protect communities from the increased risk of flooding and coastal erosion resulting from climate change; and ‘significant investment’ in offshore wind, modern ports and manufacturing infrastructure to increase the share of energy generated from renewables.
With the pandemic being the hot topic at present, the NIS proclaims ‘the government’s approach will create jobs to support the recovery from COVID-19’. However, in the words of the government, ‘key industrial areas are at the heart of the transition to net zero’, meaning the NIS is not only set to provide a near-term boost to key industrial areas but also to drive change and sustain growth through the short term.
Conclusion
Alongside the three central objectives of the NIS, the government intends to facilitate further private investment in infrastructure and deliver infrastructure projects ‘better, greener and faster’ through the establishment of a UK infrastructure bank. This bank is intended to co-invest alongside the private sector and catalyse spend on capital projects; reform of the development project planning system and surrounding regulations, ultimately streamlining the approval process; produce an overarching policy paper on independent economic regulations in 2021; and other NIS remits.
The NIS not only provides a long-term perspective of the UK’s infrastructure ambitions but also envisages fundamental change to regional economic development and how infrastructure delivery is considered across the United Kingdom. While the results of a successful NIS would be reflected in what the government hopes will be robust and sustained GDP growth, the benefits will be felt by wider society. By way of targeted infrastructure investment, the NIS should cause business activity, employment and productivity to flourish in regions that have traditionally been deficient in public funding.
Industries set to benefit from the NIS:
F41.202 - Residential Building Construction in the UK
F42.110 - Road & Motorway Construction in the UK
F42.120 - Railway & Underground Railway Construction in the UK
F42.130 - Bridge & Tunnel Construction in the UK
F42.210 - Water Main, Sewer System & Related Project Construction in the UK
F42.220 - Electricity & Telecommunications Infrastructure Construction in the UK
F42.910 - Dam, Harbour & Other Water Project Construction in the UK
F42.990 - Civil Engineering Project Construction in the UK
SP0.047 - Healthcare Construction in the UK
UK0.005 - Infrastructure Maintenance Services in the UK
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