On 30 October 2015, a new independent National Infrastructure Commission (NIC) was launched by the Chancellor, which will oversee the existing £100 billion spending commitment on infrastructure projects by 2020. This also includes the familiar £15 billion Roads Investment Strategy that was announced in the Autumn Statement 2014.
The new commission, which somewhat echoes the Labour’s Armitt Review published in September 2013, will be led by a former Labour peer, Lord Adonis. In addition, the group is formed of seven Commissioners, including members who have dealt with infrastructure investment or worked on some of the largest infrastructure projects such as HS2. While the new body was broadly welcomed by many, little is yet known about the new commission. So what is the purpose of the NIC?
The NIC has been set up with the aim of providing unbiased analysis of UK’s long-term infrastructure needs, which will provide greater certainty for investors and, in turn, enable effective and efficient investment in infrastructure for the UK.
The group will produce a report at the start of each five-year Parliament, offering recommendations for priority infrastructure projects. The commission’s initial focus will be across three key areas, which are:
- Northern connectivity – identifying priorities for future investment in the North’s strategic transport – both on rail and road to improve connectivity of the Northern cities particularly east-west across the Pennines. Following the advice of the NIC, a new £300 million Transport Development Fund has been established, which will support schemes such as the Northern Powerhouse Rail (also known as HS3).
- London’s transport system – particularly reviewing strategic options and identifying priorities for future investment in large scale transport improvements – on road, rail and underground, including Crossrail 2.
- Energy – reviewing how the UK can better balance supply and demand in the most efficient way. The NIC will look into solutions such as a large scale power storage – where innovation is needed to bring down costs.
With the NIC now in place, it will indeed provide greater certainty for investors, which is vital as 64% of the project pipeline is funded by the private sector. Of this, approximately 41% represent major projects, which are largely from the energy sector, such as Hinkley Point C; in other words, facilities that are always likely to be a political minefield.
The new body aims to remove the politics from decision-making. Airport expansion is one prime example, where an independent commission was set up to recommend an extra runway at either Heathrow or Gatwick. While politics was taken out of the process during the recommendation stage, it appears to have stepped back in during decision-making. The government’s decision has been delayed for another six months, largely seen as too politically-sensitive to take place before the London mayoral elections. In a similar vein, should we anticipate that politics makes a comeback under the NIC? Maybe you can’t take the politics out of infrastructure after all.