The National Infrastructure Commission invited ICE experts to discuss the emerging second National Infrastructure Assessment (NIA2).
The National Infrastructure Commission’s (NIC’s) forthcoming five-yearly review of UK infrastructure will need to tackle some substantial challenges.
Due later this year, the NIC’s second National Infrastructure Assessment (NIA2) will make recommendations to the UK government on the country’s long-term infrastructure needs.
Rising inflation continues to constrain investment options, and progress towards decarbonisation, resilience, and regional growth is faltering in many areas.
The NIC needs to carefully frame the challenges ahead to ensure its recommendations are as targeted, strategic, and efficient as possible.
In December, the NIC invited the ICE to analyse and discuss progress to date on NIA2 and inform the emerging policy that will guide upcoming work on the report.
Several ICE fellows – representing decades of combined experience in energy, flooding, net zero, productivity, resilience, transport, water, and more – took part in the rich and productive discussion.
Background
The NIC produced its first assessment in 2018. The government responded in 2020 with the publication of its National Infrastructure Strategy.
In 2021, the NIC published its NIA2 Baseline Report, identifying three strategic themes for the second Assessment:
- net zero
- climate and environmental resilience
- levelling up
The commission will make its recommendations for public investment in economic infrastructure within a guideline ‘fiscal remit’ of between 1.1 and 1.3% of GDP. This means the majority of the funding burden falls on the private sector.
NIA2 is an opportunity to reframe the discussion about public funding – emphasising the difference between ‘affordability’ and ‘value for money’ and demonstrating to policymakers the consequences of underinvestment.
A zero-carbon National Grid
Net zero is the biggest infrastructure challenge the UK faces. While key sectors are making progress, they all need to do more.
The NIC is keen to make robust, evidence-led recommendations for the rapid decarbonisation of the three biggest emitters: transport, energy (electricity and heat), and waste.
The ‘net zero’ pillar of NIA2 will focus on decarbonising energy and heat, and new infrastructure networks for hydrogen and carbon capture and storage.
New networks will be of particular importance in decarbonising difficult sectors such as heavy industry and transport.
Questions remain as to who will fund, coordinate, and deliver these networks, as well as how (and how quickly).
A cohesive energy policy that explores the integrative possibilities of all available technologies could help meet the UK’s energy needs far more strategically, sustainably, and affordably.
Climate and environmental resilience
The longer-term outlook presents questions of its own, not only about implementation, but adaptation too.
Today’s infrastructure challenges are happening against the backdrop of unprecedented climate change and nature loss. This will, in the coming decades, place increasing strain on the resilience of our infrastructure systems.
Surface water flooding presents a very real risk, which severe skills shortages hinder local authorities’ power to tackle. NIA2 provides the opportunity to encourage government investment in capacity building, as the commission has set out in its recent report, Reducing the risk of surface water flooding.
It’s also a chance to identify and reprioritise growth centres based on a holistic outlook.
Continued emphasis on the South East, for example, is placing growing demands on the region’s already stressed water infrastructure and increasing drought risk in areas already susceptible to rising temperatures.
Levelling up
Alongside its net zero and resilience ambitions, the UK government has committed to ‘levelling up’ outcomes across the country.
This is no easy task. Disparities in regional productivity have challenged generations of policymakers.
The climate, biodiversity, and resource emergencies further complicate this issue. But they also create new economic opportunities for certain towns and cities – through, for example, investment in new energy-related industries.
NIC rightly identifies the complexity of the task ahead. No single policy area can ‘level up’ a place.
Infrastructure is necessary, but it should be part of a wider economic strategy.
A cohesive vision for transport
The NIC has identified transport as the sector with the greatest potential in this regard.
The ‘levelling up’ pillar of NIA2 focuses on improving transport provision, both urban and interurban.
Across the UK, governance and funding decisions occur ‘block by block’. Different areas and different transport modes evolve in isolation on and varying timeframes.
An uncertain funding environment exacerbates these issues: post-Covid demand patterns are not yet clear so making a business case for investment is difficult.
A national, multimodal transport strategy would improve coordination and ensure transport contributes to each of the government’s long-term objectives: net zero, resilience, growth, and more.
Encouraging systems thinking
These challenges are complex and interlinked. A systems approach to infrastructure policy – one that builds a common mindset, encourages collaboration, and links interventions to outcomes – will be necessary to address them.
The second assessment will provide the recommendations that inform public policy and stimulate the discussions we need to have at the levels we need to have them.
But it can’t, in isolation, solve the UK’s infrastructure challenges. The government has accepted over 80% of the recommendations in NIA1 – but this isn’t the same as delivering them.
The NIC is encouraging a holistic approach, and NIA2 is a crucial opportunity to promote the principles of system thinking. To meet the challenges we face, the industry must rally behind these principles.
Prefacing NIA2 is a difficult winter for user and investor confidence in infrastructure.
The NIC’s recommendations will be targeted, but underpinning them will be strategic, evidence-based, and outcome-focused thinking.
If those appraising, approving, delivering, and managing infrastructure over the next 30 years maintain that thinking, our infrastructure can live up to its potential and pay for itself multiple times over.
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