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What can the UK government do to improve strategic infrastructure policy making?

08 February 2023

A new report calls for government action to make UK infrastructure decision-making more streamlined, objective and transparent. 

What can the UK government do to improve strategic infrastructure policy making?
The Global Infrastructure Hub has recently ranked the UK first in regulatory frameworks and planning. Image credit: Shutterstock

The Lords Built Environment Committee has published its views on how effective the UK government is at infrastructure policy making and implementation.

The report follows a short inquiry last year. The ICE gave oral evidence to the committee along with the National Infrastructure Commission (NIC), the Infrastructure Projects Authority (IPA) and other stakeholders.

The committee’s focus was on how the government makes decisions for planning, delivering and evaluating infrastructure in the UK.

Here are its key findings.

1. The government must stay the course to capitalise on strategic improvements

The UK does a lot well, including the overall structure of its policymaking. The Global Infrastructure Hub has recently ranked the UK first in regulatory frameworks and planning.

This strategic framework has been strengthened in the past decade by the establishment of the NIC and the IPA.

Evidence-based decision-making, project management and assessment have all improved.

However, large-scale infrastructure projects are long-term undertakings. The benefits of these changes may take years to emerge.

The committee therefore calls on the government to continue supporting the NIC and IPA. This includes embedding the skills and capacity needed to maximise these benefits in the long run.

However, it didn’t explicitly back the ICE’s view that the NIC should be put on a statutory footing to help provide this long-term certainty.

2. Infrastructure investment could be more objective and transparent

The assessment process for project business cases via the five-case model and Green Book is relatively sound.

However, political choices and manifesto commitments often, inevitably, determine what infrastructure is planned and prioritised.

The committee says the government should set out objective criteria to explain how it selects which infrastructure projects to fund.

Clarity needed on scale of investment

It also notes that public sector capital expenditure on economic infrastructure hasn’t risen above 0.96% of GDP in any of the previous six years.

This is at odds with the NIC’s fiscal remit of proposing interventions within a window of 1.1-1.3% of GDP.

The committee doesn’t suggest the NIC’s fiscal remit should be removed. Instead, it says the Treasury (HMT) should clarify whether it will invest in infrastructure at the level of the fiscal remit.

If not, HMT should explain why and detail how its expenditure on infrastructure will be sufficient to meet the government’s growth objectives.

It also calls for more data to be made available on the regional breakdown of infrastructure investment across the UK.

3. Infrastructure planning takes too long

The UK’s infrastructure planning regime is far too slow, according to the committee.

An infrastructure planning decision now takes on average five months longer than it did a decade ago. Some projects are taking as long to get planning permission as to be built.

This is time the country cannot afford to waste when we urgently need to build the infrastructure necessary for net zero, energy security and other national objectives.

Delays can be caused by the number of planning stages, allowing multiple opportunities to challenge sometimes minor issues.

In response, the committee calls for the government to consider ‘an approach that provides all necessary planning permissions for major government infrastructure projects before construction begins’.

However, it doesn’t outline exactly what that approach should look like.

4. More time should be spent on post-project evaluation

The UK has historically been poor at delivering major infrastructure projects to cost and schedule.

The committee calls for more clarity over how and when decisions are made to cancel or continue projects that are consistently rated red for overspending by the IPA.

It also says that too little time and effort is spent on post-project evaluation in the UK.

The government should explain how it ensures that lessons learnt on one infrastructure project inform future similar projects.

It should also set out how it assesses the successes or failures of infrastructure projects in delivering the benefits for which they were designed.

Currently, many projects lack detailed benefit statements or abandon stated benefits during delivery.

5. More political control of decision-making needed

The committee says a more streamlined central decision-making process for infrastructure would help tackle these challenges.

There is currently no single ministerial responsibility to coordinate between the NIC, IPA, the UK Infrastructure Bank and HMT, and own the process of deciding and delivering major infrastructure projects.

The committee calls for the government to ensure greater political grip on priorities, and improved interdepartmental coordination. However, it doesn’t propose a structure to achieve this.

The ICE’s view

The Lords Built Environment Committee’s report sets out both recent progress and ongoing challenges for infrastructure planning and delivery in the UK.

It aligns with the ICE’s evidence that government must act to secure and fully realise the benefits of recent changes to strengthen the strategic framework.

Those changes have included creating the NIC and IPA.

However, the committee didn’t explicitly back our view that this can best be achieved by putting the NIC on a statutory footing.

We have argued that this process could begin by adding a formal mechanism in the UK Infrastructure Bank Bill for setting up and regularly updating the National Infrastructure Strategy.

The report further aligns with our evidence that more should be done to define and deliver the social, economic and environmental benefits of infrastructure investment.

The committee also draws particular attention to planning delays in delivering key infrastructure, which can have a much wider societal impact.

The UK has done much to strengthen infrastructure planning and implementation. Many of the challenges it faces are not unique but shared by governments worldwide.

However, the committee’s report follows a recent Public Accounts Committee report about the creation of the UK Infrastructure Bank.

That report highlighted risks to the UK’s strategic infrastructure framework without government action to build on the bank’s establishment and make it sustainable.

The government has to respond to the Built Environment Committee within six weeks.

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  • David McNaught, policy manager at ICE