National Infrastructure Commission calls for immediate action on infrastructure bank to crowd in green investment

The National Infrastructure Commission has called on government to make establishing an infrastructure bank a priority in 2021. It wants to see the bank operational in an interim form this  spring, so it can support infrastructure projects to help meet the objectives of economic recovery, net zero and levelling up.

In its annual monitoring report, the NIC said updating economic regulation should also be a priority for the year, enabling regulators to legislate for net zero and collaboration, create mechanisms to introduce more competition and facilitate strategic investment and innovation in energy and water.

The Commission said the UK’s first ever National Infrastructure Strategy, published on 25 November 2020, would catalyse planning, decision making, investment and delivery across all sectors, and ensure that infrastructure supports delivery of long term challenges such as achieving net zero greenhouse gas emissions by 2050 and ‘levelling up’ the economy across the UK.  It said the priority for the coming year is to turn the ambition into reality

In its monitoring report, the Commission assessed whether government had made progress on four tests the NIC had set out in May 2019:

1.    A long term perspective: The government has set out long term goals including for low carbon energy infrastructure. But in certain areas, the government continues to take a shorter-term approach, or has yet to set out its final view.

Government has yet to commit to legislating to give regulators net zero duties or develop mechanisms to introduce more competition.

2.   Clear goals and plans to achieve them: There are  clear, measurable and timebound targets on fossil vehicles phaseout, hydrogen trials, low-carbon heating and offshore wind.

It is critical these goals are now underpinned by specific policy levers and delivery plans with clear milestones. These strategies should be matched with appropriate funding commitments to secure the goals.

3.  A firm funding commitment: Government committed to invest £27 billion in economic infrastructure in 2021/22 in the National Infrastructure Strategy. This is equivalent to just under 1.2 per cent of GDP, the upper end of the Commission’s fiscal remit.  The essential consideration for infrastructure is not simply how much is spent but how well it is spent. Some infrastructure decisions must make the best use of knowledge of local conditions and be shaped by local priorities.

4.  A genuine commitment to change: Many of NIC’s recommendations, whether on nuclear power and renewables, urban transport, electric vehicles or flood risk management, do not represent a fundamental shift to existing policy. There is still more to do.

The NIC said the government has shifted decisively in favour of a flexible, highly renewable electricity system and has a ‘one by one’ approach to nuclear in line with the NIC’s  position.

Other commitments in the National Infrastructure Strategy could significantly improve the way projects are delivered, in particular, the decisions to publish cost and performance data and business cases.

In 2021 the Commission said it wants to see clear, actionable, and funded plans to deliver on energy commitments made in the Ten Point Plan for a Green Industrial Revolution, and the National Infrastructure Strategy.

Read the annual monitoring report here

 

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