5 takeaways from the UK’s second National Infrastructure Assessment

Infrastructure investment is the solution to many of the long-term challenges the UK faces.

This is the conclusion of the National Infrastructure Commission’s (NIC) second National Infrastructure Assessment (NIA2), published today.

There has been tangible progress since the NIC released the UK’s first assessment in 2018.

These include the growth in renewable electricity generation, the establishment of the UK Infrastructure Bank, further devolution deals, and clear pathways for the rollout of gigabit-capable broadband and the uptake of electric vehicles.

The NIC was established to provide the UK government with independent, evidence-based advice.

The past five years show that it’s being listened to – many of its recommendations are being implemented and the benefits to the public are already visible.

With the publication of NIA2, it’s clear that any future debate on infrastructure must use the NIC’s recommendations as its foundation.

Among the report’s recommendations is a call for major schemes to embed design principles throughout project lifecycles, highlighting the work the ICE has done to further define and develop the scope of a design champion role.

Here are five key takeaways:

1. No time for complacency

Even in areas of progress, the government cannot become complacent. There’s still a long way to go to create a decarbonised, climate resilient and growing economy.

And in too many areas, progress is too slow.

Efforts to decarbonise heat have been meagre, even though technology exists to do so.

Transport emissions aren’t declining.

Limited grid capacity and poor road and rail connectivity are holding back progress.

The cost of building infrastructure in the UK was too high by international standards, even before the impact of high inflation.

The UK must get better at controlling costs.

Greater policy certainty, faster decision-making, stable regulation and a more effective planning system are all part of the solution.

In total, NIA2 makes 46 recommendations to the government across all parts of the infrastructure system.

2. Act now to lower costs and accelerate the benefits

A better infrastructure system that can achieve economic growth across all regions, decarbonisation and improved resilience is within reach – with strong leadership from the government.

First, the right policy measures must be implemented urgently and, importantly, these decisions need to be stuck to.

Second, the NIC’s recommendations have all been costed in line with their fiscal remit of 1.1% - 1.3% of GDP per annum.

But, delivering them will require the government to spend capital in infrastructure from 2025 to 2040 to be at the upper end of that remit.

Third, private finance must increase significantly in the 2030s and 2040s across energy, digital and water.

Private capital is available but there’s intense global competition to attract it.

The upfront costs will be high, but the UK’s infrastructure will ultimately be cheaper to run.

Lower energy and transport costs will more than offset the likely long-term rise in water bills.

The NIC indicates that the average household will save at least £1,000 per year by the mid-2030s compared to today.

3. A long way to go – but decarbonisation is achievable

There’s an enormous amount to do to meet the government’s sixth carbon budget by 2035.

Twelve years isn’t long in infrastructure terms, and around 80% of the UK’s energy demand is still met by fossil fuels in some form.

The NIC’s modelling for renewable generation in 2035 (60GW of offshore wind, 70GW of solar) is in line with existing government goals.

However, scaling up onshore wind to 25GW by 2035 will require planning system changes.

The failure of the last Contacts for Difference auction means the parameters need to be changed to attract bidders in future rounds.

The NIC is also calling for the government to quickly commit to electrify heat – by ruling out hydrogen heating (the NIC says that “there is no public policy case for hydrogen heating”) and incentivising the rollout at pace of heat pumps and heat networks.

The continued rollout of electric vehicles and charging infrastructure is vital.

But the unknowns in transport decarbonisation, including public behaviour, are a concern.

The NIC wants the government to establish a new monitoring and review regime for its transport decarbonisation plans.

4. Resilience must be higher on the agenda

The NIC concludes that asset maintenance issues, such as leaking pipes and poor road conditions, are undermining the performance of the UK’s infrastructure system.

Since 2000, service interruptions in the energy and water sectors have, on average, been declining.

But interruptions in transport have been trending upwards.

Recent shocks, such as the energy price crisis, have revealed vulnerabilities and highlighted the interdependencies between infrastructure sectors.

The risks from climate change will increase due to wetter winters, rising sea levels, and drier summers.

And the NIC’s research shows that the public has low levels of confidence in the UK’s ability to cope.

Its infrastructure must become more resilient.

NIA2 echoes the ICE’s call earlier this year for resilience to be better valued in investment decisions.

One of the challenges with making resilience a priority is that it doesn’t have a market value – currently, it’s not measured or rewarded.

The NIC calls for developing plans to deliver additional water supply infrastructure and reduce leakage, alongside reducing water demand.

It also wants long term measurable targets and funded plans to significantly reduce the number of properties at risk of flooding by 2055.

5. Prioritise connectivity to drive regional growth

England’s large regional cities are underperforming economically. Closing this ‘productivity gap’ could be worth tens of billions of pounds per year.

But outside London, transport connectivity is too poor to meet future demand, improve quality of life and enable growth.

The decision to cancel High Speed 2 north of Birmingham also leaves a major gap in the UK’s rail strategy. Many cities have based their economic growth plans around the expected new line.

The NIC says that, although home and hybrid working has increased, the long-term case for improving transport networks in and between England’s cities is still strong.

NIA2 makes the case for investing in urban mass transit systems and long-distance road and rail links to support growth.

The government should commit to investing £22 billion in major public transport upgrades from 2028 to 2045, with the bulk targeted at the largest, most economically important regional cities.

A more strategic approach to transport planning

But transport investment should be aligned with policies on land use and housing.

And, road investment needs to be compatible with plans to decarbonise transport.

Long distance links should prioritise maintenance of existing assets, followed by enhancements, based on a systematic analysis of underperforming sections.

Getting this right will mean taking a more strategic approach to transport planning. This is why the ICE recently set out the case for a national transport strategy for England.

NIA2 also calls for the government to accelerate the devolution of powers and funding for local transport to subnational authorities.

In case you missed it

• Read the ICE’s assessment of the recent Conservative Party Conference.
• In December, the NIC invited the ICE to analyse and discuss progress to date on NIA2 – read a summary of the discussion.