September 27, 2016

A year’s review of the National Infrastructure Commission

The National Infrastructure Commission (NIC), established by the Chancellor George Osbourne and the Conservative Government on 5 October 2015, was created to oversee approximately £100bn worth of spending on infrastructure in the UK as part of their plan to "get Britain building".

 The idea for the NIC was lifted from Labour's manifesto for the General Election of 2015 which stated the need for the creation of an independent body to set clear priorities for UK infrastructure investment over the next 25-30 years following Sir John Armitt's review for the party into how Britain could improve its poor record of project planning and delivery. 

The intention was that the NIC publish a National Infrastructure Assessment every Parliament, detailing its analysis of the UK’s infrastructure needs and then the Government of the time would be required to formally respond to the recommendation. This would be cemented in legislation so that the NIC was an independent body with the strength to continue with its investment plans regardless of a change in government. As in independent organisation, it would offer unbiased analysis of the UK’s long-term infrastructure needs without the political interference which would hamper the must needed progress.

Recommendations by NIC

George Osbourne's Budget 2016 confirmed that the Government accepted the NIC's first three recommendations on "Smart Power," Crossrail 2 and connectivity between cities in the North of England, and announced more than £400m would be invested in supporting them. This included £300 million of funding to improve northern transport connectivity and giving the green light to High Speed 3, providing £80 million to fund the development of Crossrail 2 and that the Government will lay the foundations for a smart power revolution, with support for innovation in storage and other smart technologies.

Post Brexit

Since the Brexit vote, the Government has deferred a decision on whether to build a third runway at Heathrow airport and there have been calls to scrap the controversial £42 billion HS2 link between London and the North of England. It has also been argued that the NIC was undermined by suspension of Government's support for construction of the Hinkley Point nuclear power station, which the NIC had down as a top priority, albeit the government has now confirmed that Hinckley will proceed subject to the introduction of a new legal framework. 

The latest casualty of the Brexit vote/May Government is the NIC's statutory footing which was once promised. Prior to the referendum on EU membership, a consultation response in May 2016 committed the Government to legislating for the NIC, formalising it as an independent, non-governmental body and obliging the Government to respond to its recommendations.  In the Queen’s Speech to Parliament later that month, it was stated that the Government would introduce a Neighbourhood Planning and Infrastructure Bill to implement that commitment. However, earlier this month, rather unexpectedly, the Government has published the Neighbourhood Planning Bill, which omits provisions placing the NIC on a statutory footing.

There is no official Government statement as yet as to why the implementing legislation for the NIC has been dropped however, it would appear that post-Brexit and under the new Theresa May led Government, there is caution as to providing the NIC with the statutory footing to be able to commit the Government to its recommendations. Critics have and will argue that without "the teeth" to do the job; the NIC will be overlooked continuously and eventually being all but redundant. This would be seen as a complete backwards step from the very much welcomed, at least in the Construction and Infrastructure industry, establishment of the NIC and will hamper the progress it was driving for.

In the meantime, the NIC will continue to operate in its current, non-statutory footing and it's work on the publication of a National Infrastructure Assessment (NIA).  The Commission launched a 10 week consultation this summer, which closed on 5 August 2016, for all interested parties to submit their views on the process and methodology of how to take forward the nation's first NIA which is expected to be published in 2018.

Summary

The effect of Brexit and the change of Government on the NIC's influence and possible existence in the future remain to be seen. Whilst initial indications hint towards a more cautious approach from the current Government than the previous in terms of handing statutory power to the NIC, it may just be a short-term reaction brought about due to the uncertainty surrounding the economy and future withdrawal from the EU. However, with the creation of the NIC having cross party support, and welcomed by the infrastructure industry, there will be pressure on this new government to continue to support the NIC and implement the legislation promised as recently as four months ago.