State of the Nation Scotland 2018: Infrastructure Investment

State of the Nation Scotland 2018: Infrastructure Investment considers Scotland’s infrastructure investment priorities in a shifting and increasingly complex political and economic environment.

This report recognises that the demands on infrastructure services are shifting and increasing, with pressures from population growth, disruptive technologies, increasing urbanisation, and resilience issues due to climate change. It further seeks to clarify how infrastructure is currently paid for and set out priorities for infrastructure planning and prioritisation for the future.

Policies for infrastructure prioritisation

State of the Nation Scotland 2018 makes seven recommendations for Scottish and UK governments to consider.

Three recommendations set the strategic direction for a long-term approach to infrastructure through its whole life – not just construction. Infrastructure investment and planning must move beyond short-term political cycles, and be founded on a shared vision underpinned by cross-party commitment.

Four of the report’s recommendations focus on sector-specific ideas to ensure maximum value is realised from major capital investments, and support future investment decisions. One of those looks specifically at how we can better fund Scotland, and the UK’s, roads.

These recommendations are:

Sector-specific interventions to enhance infrastructure investment

• Roads: The Scottish Government and local authorities should commit to multi-year funding for roads. The Scottish Government should consider how replacements for VED and fuel duty could be used to fund road asset maintenance and should consider the potential benefits from regulation of Scotland’s roads.
• Energy: The Scottish Government should accelerate its efforts to decarbonise heat as a matter of priority. Scottish and UK governments should continue to work together to focus on achieving maximum value and resilience from existing energy infrastructure. Both governments should explore the legislative mechanisms available to enable new technologies, like storage, to access the market.
• Water: Expenditure should increase on water and waste water asset maintenance which is critical for maintaining service, reducing the risk of loss of this vital service to customers. Industry should seek to advance its use of data and analytics to support maximum efficiency in delivery, operation and maintenance.
• Rail: Increased efforts should be made to identify opportunities for improved efficiency in delivery and maintenance, building on lessons learned during control period 5.

Overarching policy recommendations for government

• The Scottish Infrastructure Commission should be independent and build cross-party consensus to support a consistent, long-term approach to infrastructure planning and investment. The Commission should undertake an assessment of Scotland’s long-term infrastructure needs to inform its future work.
• Long-term asset planning and maintenance should be declared as a National Infrastructure Priority. Asset maintenance is a fundamental part of a resilient and productive Scottish infrastructure system.
• The Scottish Government, infrastructure clients and industry should work together to address the problems associated with transactional industry contract models and ensure that risks in delivering public infrastructure projects are allocated fairly and appropriately.