The UK government has published its updated National Infrastructure and Construction Pipeline. But will it help deliver the vision set out in the National Infrastructure Strategy?
The 2021 National Infrastructure and Construction Pipeline outlines nearly £650 billion of projected public and private investment in UK infrastructure over the next 10 years.
The investment is targeted to strengthen the UK’s infrastructure and help deliver the government’s strategic priorities, such as levelling-up and net zero.
By setting out planned public and private infrastructure investment, the pipeline allows investors and the construction industry to plan for the talent and machinery required to deliver projects.
What is in the pipeline?
Of the projected £650bn of public and private investment, £200bn will be invested by 2024/25. For the first time, the pipeline also forecasts future workforce demand, with the investment expected to generate around 425,000 jobs annually over the next four years.
The new pipeline is also the first to earmark where investments and procurements will substantially use modern methods of construction (MMC) which are designed to be more sustainable.
Transport receives the largest share of planned investment up to 2024/25, with almost £70bn, followed by energy at £51.3bn.
Notable projects include High Speed 2, and Hinkley Point C, the Transpennine rail route upgrade, the Lower Thames Crossing and Thames Tideway sewer tunnel.
The pipeline up to 2024/25 is split roughly 50/50 between public and private sector funding, which is in line with historic investment. The transport sector in particular remains heavily reliant on public funding.
However, as we noted regarding the previous pipeline in 2018, the long-term sustainability of this is questionable. Revenue from current road and vehicle taxes is likely to fall with the shift to electric vehicles, while public transport may require new revenue models to adapt to post-Covid commuter trends.
How does the pipeline align with the National Infrastructure Strategy?
The National Infrastructure Strategy (NIS) provides a strategic outlook for how the UK’s infrastructure is planned and delivered to address the country’s short- and long-term challenges.
The pipeline provides further detail for investors and construction companies of how this will be delivered at ground level, but how closely does it align with the vision set out in the NIS?
The NIS prioritises levelling-up, strengthening the union and reaching net zero. It pledges to shift spending from London and the South East to the UK’s other regions and nations, and to enable more locally-led decision-making.
The pipeline includes many of the key projects and pledges contained in the NIS. In terms of levelling-up and connectivity, it sets out major investment to improve digital connectivity through the Shared Rural Network and Project Gigabit programmes.
There are transport initiatives to improve regional connectivity and give subnational governments more control over their transport infrastructure, such as the £4.2bn intra-city transport settlements for England’s eight city regions, as well investment in the strategic and local road networks, including the A66 Northern Transpennine dual-carriageway upgrade and the A303 Stonehenge Tunnel.
The pipeline also aligns with the key net-zero pledges in the NIS. It details significant investment in nuclear energy at Sellafield and Hinkley Point and in renewable energy generation, including 11 wind farm projects.
Incorporating the NIS’s ambition to decarbonise transport, the pipeline includes several projects with several supporting the transition to electric vehicles, like the £950m rapid charging fund for motorways and A roads.
The NIS also highlights the importance of climate adaptation, pledging to invest £5.2bn by 2027 to boost resilience. To this end, the pipeline includes a number of flood and coastal defence programmes.
Strengthening long-term infrastructure planning
The NIS sets out to provide a coherent framework for infrastructure planning and address some of the long-term issues that have held back the sector, including ‘stop-start’ public investment, insufficient funding for regions outside of London and policy uncertainty that undermines private investment.
The pipeline is part of a package of tools designed to deliver on this ambition, which also includes the Transforming Infrastructure Performance: Roadmap to 2030 and the new UK Infrastructure Bank.
Nevertheless, the current iteration of the pipeline does not address all of the issues we have previously identified through discussions with investors.
These suggested that more information on the risks and viability associated with individual projects, the variability of returns or further details around project planning and the scale of programmes would make the pipeline more effective.
That said, it is a positive sign for infrastructure planning, and for giving investors and the construction industry confidence and clarity that the latest pipeline is closely aligned with the NIS.