NIC announcement is encouraging news
Before the general election, Sir John Armitt prepared a proposal for an independent National Infrastructure Commission, and a draft bill which would see this proposal enacted by the Labour Party in the event that they were elected.
We now all know what happened, so it is with some surprise – albeit a welcome surprise – to hear George Osborne announce yesterday that a National Infrastructure Commission (NIC) will be set up, with a small board to be appointed by the Chancellor. It will be responsible for delivering a long-term plan and an assessment of national infrastructure needs early in each parliament, and for setting out what a government is expected to do over the next term. To do this, it will be able to commission research and call for evidence from public sector bodies and private sector experts.
The NIC will start work immediately, with an initial remit to report before the next budget on:
- A plan to transform the connectivity of the Northern cities, including high speed rail (HS3)
- Priorities for future large-scale investment in London’s public transport infrastructure
- How to ensure investment in energy infrastructure can meet future demand in the most efficient way
It will also begin work on a National Infrastructure Strategy, which will look 30 years ahead and will examine the evidence across all key sectors of economic infrastructure – including energy, roads, rail transport, ports and airports, water supply, waste, flood defences, digital and broadband – with a view to fostering economic growth. And in a welcome move, it will also consider how investment in these sectors can support housing development. It will focus on Nationally Significant Infrastructure, but will not re-examine existing commitments (for example, the work of the Airports Commission, or HS2 which was considered part of the baseline for the National Networks NPS). Nor will it seek to reopen regulatory price controls.
The NIC will be asked to report on its assessment of the UK’s infrastructure needs every 5 years, updating its reports on a rolling basis, and with echoes of the Armitt Review, the government will be obliged to respond to its recommendations, either accepting them or setting out how the government will develop alternatives. Importantly, Parliament’s role in the approval of planning policy will be unchanged. The effectiveness of this approach may therefore rest on the effectiveness of the Commission to hold the government to account in its responses to its plans, and the following implementation of its proposals.
The Chancellor clearly feels that the NIC can help to improve forward planning, support timely investment decisions, and provide greater certainty for investors. It will begin work immediately in an interim form, before being made permanent by legislation. The Treasury will soon be consulting on the terms of reference for the NIC, how it will advise government and how it will go about its work. One key aspect of its arrangements will need to be how the independence of the NIC will be secured to ensure that its advice represents the most appropriate advice for the UK, without interference from the political process.
Another key issue will be the extent to which the Commission will be permitted to consider the benefits of considering infrastructure issues in a more integrated way. Of particular importance is the relationship between transport, economic growth and housing needs, but many other infrastructure needs have a spatial element – and there have to be ways of securing efficiencies through better planning at the national scale.
The announcement of the NIC has started on a good note, further improved by the appointment of Lord Adonis to lead it. Lord Adonis understands these issues, and can navigate his way through the technical, policy and political intricacies which will no doubt begin to press in on the Commission in due course. That he has withdrawn from the Labour Whip to do this is a great sign of intent, and we should all be wishing him the best of luck.
Keith Mitchell is a Board Member of the National Infrastructure Planning Association.