Spending Review 2021: what are the infrastructure decisions that need to be taken? 

ICE’s submission to the government's upcoming Spending Review sets out recommendations for ensuring sustainable funding for infrastructure which delivers on societal objectives 

ICE calls for the government to publish the Integrated Rail Plan to improve connectivity in the North.improved rail connectivity in the North. Image credit: Shutterstock
ICE calls for the government to publish the Integrated Rail Plan to improve connectivity in the North.improved rail connectivity in the North. Image credit: Shutterstock
  • Updated: 14 October, 2021
  • Author: David McNaught, ICE Policy Manager

This autumn is set to be a busy political period with several important announcements expected, including the government’s Net Zero Strategy, the Treasury’s Net Zero Review, more details about the levelling-up agenda, as well as COP26 in Glasgow.

The need to make key policy choices about how we will tackle long-term challenges, as well as sustaining the economic recovery from Covid-19, means we are in a critical period for UK infrastructure planning.

The 2021 Spending Review (SR21) and Autumn Budget will provide more details about how government plans to invest in infrastructure to deliver on these objectives.

The government has already committed to increasing spending in infrastructure, recently announcing a pipeline of £650 billion of public and private investment over the next 10 years, including £200 billion up to 2024/25.

ICE has been engaging with policymakers to ensure the role of the UK's infrastructure system is maximised to support the delivery of the SR21 priorities.

ICE’s submission to the Spending Review

Our submission sets out how the UK’s infrastructure planning can be directed towards achieving the societal outcomes the government has prioritised, using the UN Sustainable Development Goals (SDGs) as a framework, while ensuring sustainable investment for infrastructure delivery and performance. Our recommendations include:

1. Update the objectives for the National Infrastructure Commission (NIC) to include net-zero and the SDGs

The current strategic infrastructure framework, centred on independent and impartial advice from the NIC, has strengthened the identifying, prioritising and planning for infrastructure system interventions in the UK.

But going forward there will be competing demands for infrastructure investment – greater weight should be given to achieving long-term challenges and opportunities such as the SDGs and the Paris Climate Agreement, and the NIC’s objectives should be updated to reflect this.

2. Ensure the Net Zero Review future-proofs funding for net-zero infrastructure

The Net Zero Review should detail the government’s plans to ensure sustainable funding for infrastructure as we transition to a net-zero economy.

In particular, we need a public debate about the future of roads funding. With the policy for all new cars and vans to be effectively zero emission by 2030, new revenue models will be needed to replace funding lost from fuel duty and Vehicle Excise Duty (VED). ICE has previously explored the options for a ‘Pay As You Go’ model which could future-proof revenue from vehicles.

3. Use the SDGs as a starting point for future funding for levelling-up

We need a clear definition of what levelling-up is, the societal outcomes being sought and the metrics for measuring success. Without this framework, the investment directed towards levelling-up could be wasted.

Many SDGs link to subnational development. Using these as a basis for levelling-up investment would help ensure it is directed to projects that meet national objectives.

4. Publish a comprehensive Net Zero Strategy which takes decisions on the policy trade-offs needed to maximise the use of infrastructure as part of the transition

There remains a gap between the UK’s ambitious net-zero target and realistic policy to achieve it, with key policy choices still to be answered through the Net Zero Strategy, including decisions on the future energy mix, pathways to decarbonising transport and heat, and options for reducing emissions from harder-to-abate sectors.

The UK also faces a climate adaptation deficit, despite the effects of climate change becoming more evident and the growing risk of cascade failure across interdependent infrastructure systems.

5. Start the journey towards sustainable post-Covid-19 public transport funding

An affordable, accessible public transport system is vital for achieving both net-zero and levelling-up. As ICE outlined earlier this year, we need to think differently about service and revenue models with the Covid pandemic likely to drive lasting change in travel patterns.

SR21 should outline the short and medium-term plans for funding public transport. If government funding continues it should be with a view to a sustainable transition that considers transport holistically. If public transport is not sustainably funded, we risk causing a spiral of decline which must be avoided if we are to meet objectives like net zero and the SDGs.

6. Learn from uncertainty in demand by boosting investment in the National Digital Twin programme to reinforce Transforming Infrastructure Performance 2030 (TIP) ambition

In the context of uncertain infrastructure demand, the digitalisation of the UK’s infrastructure networks will be vital to improving the performance and resilience of our infrastructure by allowing a better understanding of assets in use. It will enable the more effective use of data to enhance infrastructure performance in different economic scenarios following the end of the pandemic.

7. Publish the Integrated Rail Plan (IRP)

ICE has argued for improved connectivity and transport capacity in the Midlands and the North for many years. An IRP, alongside local decision-making, is an effective way to deliver this, but needs to be published soon to avoid delays to the delivery of ongoing and planned projects, as well as to provide certainty to project promoters, investors, industry and the supply chain.

Our full submission goes into further detail on these areas, and we encourage ICE members to engage with us on the suggestions, ideas and solutions in the lead-up to the Spending Review.

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