The Government has published the UK Infrastructure 10-year Strategy which sets out the plans for investment over the next decade. At least £725 billion will be made available - which will continue to grow in line with inflation from 2029 after the current Spending Review period. This will be across a wide range of infrastructure sectors including health, education, digital, housing and prisons to fulfil the Government’s plans to kick start economic growth and meet the country’s social, economic and environmental challenges.
Joined up approach to delivery of projects
Historically, infrastructure projects have been held up with long planning consent times, funding shortages and political indecisions causing delays. The new strategy will go some way to address this by providing a new digital spatial planning tool which will link environmental, infrastructure, industrial growth and housing needs.
This will support planning and investment at a local level and will help authorities play their part in delivering the wider national infrastructure vision. They will have better integration of infrastructure policy, strategy and delivery.
The Government is also releasing a new online infrastructure pipeline which is expected in July. This will provide details of over 300 priority infrastructure projects that are due over the next ten years and will be updated every six months. These will include environmental projects such as flood defences and rail upgrades etc.
The pipeline will provide greater transparency on what projects are in the planning stages and in turn will allow investors to see that there are opportunities to drive growth while having the foresight to address the skills gaps and supply chain required to deliver these.
The National Infrastructure and Service Transformation Authority (NISTA), established as part of the strategy, will partner with the Government to implement and review on a regular basis. They will work to streamline the planning process for major projects to go ahead as part of the Government’s assurance and assessment process improving the delivery of capital projects.
Use of private investment
It is anticipated that at least half of the funding being made available for infrastructure projects will come from private investment. The strategy is designed to prove to investors that the UK is a country that they can have confidence to invest in.
The Government plans to use public and private partnerships (PPPs) but within closely managed situations, striving to prove that they have learned from past experiences of using this model. They will explore the use of PPPs where revenue streams can be found, and risk is managed and on taxpayer funded projects where it provides value for money such as primary and community health infrastructure. More details on how PPPs will be used will be released in the Autumn Budget.
Which other sectors will benefit from this investment?
Sectors the strategy has highlighted will receive investment include health, education and energy.
Health
Over £6 billion per year will be used to create ‘safer hospital environments’ which will reduce waiting times, improve patient experience and treatment and create better working conditions for NHS staff by addressing critical infrastructure risks. This supports the vision of the Government to create an ‘NHS fit for the future’.
Andy McNulty, UK Head of Healthcare, comments “It’s encouraging to see the funding of £6 billion annually to address the escalating challenge of the NHS estates backlog. This is, beyond a doubt, one of the most significant obstacles the sector faces, and we’re looking forward to working with our clients to support them in efficiently delivering these vital projects. Beyond the funding allocations mentioned there is also a hint of structural change in funding models, with the government committing to explore the feasibility of using new Public Private Partnerships (PPPs) in limited circumstances. Both primary care and community heath infrastructure are cited as areas for potential adoption, like the current third-party developer route at present, with PPP also potentially being utilised to drive the decarbonisation and the wider sustainability agenda. More details are expected to follow in the Autumn Budget.
Making sure that we address the construction skills gap will be vital in ensuring that the sector can continue to support the NHS properly. With the 10 Year Health Plan due later in the year, many in the sector will be looking to see what the Government’s vision for healthcare looks like.
Energy
£2.6 billion will be provided to decarbonise transport and concentrate on supporting the continued rollout of electric vehicles, providing national charging infrastructure to meet the clean energy target for 2030.
Nuclear energy is a key part of the strategy, and funding for Sizewell C has already been announced in the recent Spending Review. There is also funding being made available for small modular reactors and nuclear fusion research furthering the UK’s vision to provide low-carbon electricity on a large scale.
Andy Ellis, Global Head of Energy, comments, “This report unveiled ambitious goals for the UK to become a clean energy superpower, and it’s positive to see financial support for carbon capture and hydrogen technologies to help us move towards the UK’s net zero targets.
With the recent news in the Spending Review geared predominantly at nuclear, it’s encouraging to also see the emphasis on exploring where public-private partnerships can be used to bolster the country’s investment into renewable energy generation and battery storage. By using a broad mix of methods, we are more likely to meet the goals coming up in 2030. What we need now is an impetus from the Government and wider industry to get more young people interested in construction careers, to help support the delivery of these vital schemes.
How will the strategy be successful?
The success of the strategy will largely depend upon the long-term support of the Government. They will need to be transparent in the role that NISTA plays, ensuring that they continue to monitor the implementation of the strategy and amend as appropriate. In turn this will give confidence to investors who have an integral part in providing the financial input the strategy is dependent upon.
More importantly, the Government must take real steps to address the challenges that UK infrastructure is facing, achieving the ultimate objective of the strategy in bringing much needed transformation and change.
Paul Knighting, Head of Infrastructure UK, comments ‘‘It is fantastic that the UK Government has introduced the UK Infrastructure Strategy, setting a roadmap for improving the speed and delivery of capital projects across the next decade.
They will need to show that they have the long-term vision to ensure that it is a success, providing the certainty and stability needed to attract investment, boosting British supply chains and jobs, and taking a joined-up view to improve planning and delivery across all types of infrastructure.
