Cash boost and ambition needed to improve UK infrastructure, advisers say

UK is at a “pivotal moment... to make a major difference to this country’s future", but must “get on with it”, commission says
Blithfield Reservoir in Staffordshire. No new major water resource reservoirs have been built in England in the last three decades, the NIC said. Photo: Jon Lewis/Alamy Stock Photo

Government must stump up more cash to address “significant deficiencies” in UK infrastructure and embark on an “ambitious and sustained programme of policy change with clear direction”, its advisers have said.

Around £30bn a year of public spending on national infrastructure is needed in the 2030s and 40s – up from about £20bn a year over the last decade – to bolster the UK’s economic security, improve people’s lives and help meet the net-zero target, the National Infrastructure Commission said.

But the government must also work to galvanise more private sector investment in infrastructure, according to the second National Infrastructure Assessment, published this morning. It estimates that private investment will need to increase from £30-40bn over the last decade to £40-£50bn in the 2030s and 2040s.

Efforts to reach net zero are among the key targets for investment, the NIC said – estimating that £20-£35bn of private sector investment will be needed in areas such as renewable-energy generation capacity, electricity and hydrogen networks, and carbon capture and storage.

Better transport within and between cities will need around £28bn a year from the public sector; and improving resilience and the environment will take £1-1.5bn of public spending and £8-12bn of private investment a year over the next 30 years, the report estimates.

The report calls on the government to address “significant deficiencies in the UK’s economic infrastructure and ensure it can meet the challenges ahead”.

These deficiencies include underinvestment in transport systems in regional English cities, which the NIC said must be reversed to "unlock economic growth". The list also includes a failure to build any major water resource reservoirs in England in the last three decades; the high number of buildings at risk of flooding; and recycling rates, which have not increased in a decade.

“This situation must improve,” the report says.

The comprehensive assessment includes a number of specific recommendations that it says will deliver an economic boost and cut costs for taxpayers in the long run.

They include:

  • Adding low-carbon, flexible technologies to the electricity system and creating a strategic energy reserve to increase economic security by reducing its reliance on global energy sources
  • Paying to install heat pumps for lower-income households and offering £7,000 in support to all others to lower energy bills
  • Improving "underperforming" parts of the road and rail network; and developing a new "comprehensive and long-term" rail plan to benefit the north and midlands
  • Ensuring gigabit capable broadband is available nationwide by 2030 and supporting the rollout of 5G services
  • Coming up with plans to add water-supply infrastructure and cut leakage, as well as reducing water demand
  • Setting long-term, measurable targets to cut the number of properties are at risk of flooding by 2055
  • “Urgently” implementing reforms to meet the 2035 target of recycling 65% of municipal waste, and creating stronger incentives for investment in recycling infrastructure

“The commission’s recommendations require an ambitious and sustained programme of policy change with clear direction,” the report said.

“Realising the benefits will require a significant increase in overall investment in economic infrastructure. These investments are vital to the challenges ahead. Making them now should lead to lower overall costs for households and businesses for the long term.”

Writing in the report’s foreword, NIC chair Sir John Armitt said the UK is at a “pivotal moment in time, with the opportunity to make a major difference to this country’s future”.

“But we need to get on with it,” he said, noting that to be on track to meet its 2050 target to reach net-zero emissions, the UK will need to have made significant progress on decarbonising electricity, transport, industry and heating by the Sixth Carbon Budget in 2035.

“In infrastructure terms, 12 years is not a long time,” he added.

Alongside the net-zero goal, there is a “pressing need to improve productivity and fix decades of economic disparity between regions”, Armitt said.

“These goals require clarity and consistency of policy and regulation alongside an improved planning system to get major infrastructure projects built on time. That’s how we will attract investment and action from the private sector,” he added.

“Stable public funding will be also needed, particularly to help households with the upfront costs of an energy transition that will lead to long term benefits and cheaper bills.”

The government committed to spending around £30bn in 2022-23 to 2024-35 at the last spending review, but the NIC has called for longer-term investment.

It also urged the government to ensure it meets the spending review commitment, adding: “This is a sharp rise, and government should ensure that it does get spent. In recent years one in every six pounds of planned capital expenditure has gone unspent,” the report added.

Writing for CSW last winter, NIC chief executive James Heath described the NIA, which is published every five years, as the commission’s “landmark product”.

“We’re uniquely placed to offer expert advice that looks beyond political cycles and cuts across traditional silos. Infrastructure is key to helping solve some of society’s biggest economic and environmental challenges – but achieving this will require both big capital investment and the right policy and regulation,” he said.

“So, we’re trying to help policymakers and infrastructure operators square the circle of scaling up investment at the same time as considerable constraints on the public’s ability to pay for it.” 

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