Report calls for urgent action to modernise infrastructure

Improved infrastructure to boost economic growth across the UK and meet climate goals is both achievable and affordable if the right policy steps are taken now, according to the government’s independent advisers on infrastructure strategy.

The Second National Infrastructure Assessment – a five yearly review conducted by the National Infrastructure Commission – sets out a programme of transformation for the country’s energy, transport and other key networks over the next 30 years.

Its recommendations include:

• backing electrification as the only viable option for decarbonising buildings at scale, to reduce reliance on volatile fossil fuels, lower energy bills over the long term and to meet the UK’s climate targets, with government fully subsidising the costs of installing a heat pump for one third of households – based on income – and offering £7,000 support to all others to switch to a heat pump or heat network
• adding low carbon, flexible technologies to the electricity system to ensure a highly renewable energy system remains reliable, and creating a new strategic energy reserve to boost Great Britain’s economic security
• major public transport upgrades in England’s most congested cities to unlock economic growth, and an urgent and comprehensive review of rail priorities for the North and the Midlands following government’s recent decision on High Speed 2
• better maintenance of existing roads and targeted enhancements to speed up journeys on underperforming parts of the national road network
• building additional water supply infrastructure and reducing leakage, while introducing compulsory water metering as part of efforts to reduce water demandUrgently implementing reforms to meet a 65 per cent recycling target by 2035 and phasing out energy from waste plants that do not include carbon capture facilities.

The report is upfront about the need for significant public and private investment in infrastructure if the UK is to rebalance its economic geography, meet climate obligations, improve resilience and enhance the natural environment.

The Commission calculates that government’s commitment to a sharp increase in public sector investment in infrastructure to around £30 billion per year will need to be sustained until 2040. This sits at the top of the funding envelope set by HM Treasury for the Commission’s recommendations of up to 1.3% GDP a year. Meanwhile, private sector investment will need to increase from around £30-40 billion over the last decade to £40-50 billion in the 2030s and 2040s.

Attracting this investment to the UK in the face of global competition will require a new approach, says the Commission:

• policy stability: setting out a clear plan and sticking to it, to lend certainty to investors and help build up supply chains
• pro-investment regulation: clear guidance from government on priorities, investment ahead of need and business models to support emerging technologies
• speeding up the planning system for major projects, particularly energy transmission schemes: with regularly updated National Policy Statements from government, strategic spatial planning, more effective sharing of environmental data and clearer community benefits in return for hosting key infrastructure.

The Assessment also sets out the likely impact of the Commission’s recommendations on households, where private investment is recouped through infrastructure service bills. It finds that the average household will save at least £1,000 per year by the mid 2030s compared to today, largely driven by the transition away from fossil fuels onto cheaper low carbon electricity.

The report draws on two years of analysis, expert engagement and public research, resulting in what Commission Chair Sir John Armitt labels “probably the most comprehensive assessment yet of the infrastructure costs associated with supporting regional growth and reaching net zero”.

Sir John Armitt, Chair of the National Infrastructure Commission, said: “The good news is that modern, reliable infrastructure can support economic growth, help tackle climate change and enhance the natural environment.

“We stand 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.

“People often talk about infrastructure as the backbone of our economy: what our infrastructure needs now is the collective mettle to turn commitments into action that will reap rewards for decades to come.”

Government is expected to respond formally to the Assessment within 12 months.