NIC warns that stuttering infrastructure delivery will lead to missed economic and net zero goals

The NIC has published its Infrastructure Progress Review 2023 and has called for the government to make fewer, bigger and better-targeted initiatives to deliver the infrastructure needed to reach its long-term net zero and economic goals.

It believes that “infrastructure is a key part of the solution” to reaching net zero because climate is primarily an infrastructure challenge. Two thirds of emissions come from the six sectors covered by the NIC (digital, transport, energy, flood resilience, water, waste) and figures from the Climate Change Committee suggest that up to £50bn of investment will be needed annually for the next 25 years in order for the UK to reach net zero.

The report states that, while progress is being made, “the elements needed for successful delivery of the Commission’s recommendations and government’s ambitions are not currently all in place.” It says that significantly more action is needed to meet the Sixth Carbon Budget and that progress on delivering the ambitions set out in the government’s Levelling Up White Paper have been too slow. It adds that “barriers on the ground, such as the planning system, are slowing deployment across the board”.

Its over-arching recommendations to the government for “getting back on track” are:

• Develop staying power to achieve long term goals; stop creating uncertainty with continual chopping and changing infrastructure policy
• Fewer, but bigger and better interventions from central government with tighter strategic focus on the areas it can make the most difference rather than “expending too much effort on many small scale funding interventions and repeated consultations, trying to maintain optionality in all areas”
• Devolve funding and decision making to local areas, moving away from competitive bidding processes and building on the multi year funding settlements for combined authorities
• Remove barriers to delivery on the ground , specifically the planning regime for nationally significant infrastructure projects, where updated National Policy Statements for key sectors are the first big step

The NIC’s review of progress against its recommendations and government’s commitments in each of the key sectors within its remit is summarised below.

Transport

The NIC has specifically called for a “greater sense of certainty” around the progress of High Speed 2 (HS2) and Northern Powerhouse Rail (NPR). It says that there must be no delays to the current timetable for delivering HS2 services to Manchester, which is currently expected in the 2035-2040 window.

Looking at transport more broadly, the NIC has reiterated its recommendation that local areas be given long-term funding settlements for transport to aid planning and have greater control over investment. This will move away from the “damaging system of competitive bidding for grant funding that erodes local capacity”.

On that front, the NIC is pleased to see the “trailblazer deals and single multi year budgets announced for Greater Manchester and West Midland Combined Authorities” and the commitment to provide a second five-year funding deal for England’s largest Mayoral Combined Authorities. However, it adds that “devolution must stretch across the whole country not just to major city regions. Progress empowering local authorities and helping them build capacity and capability must continue.”

The report says that the government’s commitment to support the West Yorkshire Combined Authority to plan and build its £2bn mass transit system is “positive” but “falls short of the ambition for major urban transport investment the Commission set out in the National Infrastructure Assessment”.

It comments that action on improving transport in the Cambridge-Milton-Keynes-Oxford arc “remains slow and the government’s long term commitment to the road infrastructure needed to unlock growth in the region is unclear. If this does not change, the country will miss a significant growth opportunity”.

Energy

The NIC says that good progress has been made towards the UK having a highly renewable electricity system, with 40% of electricity having been generated from renewable sources in 2022. However, it is concerned that there are only 12 years for the UK to reach its promise of a decarbonised electricity system by 2035. “Barriers to further renewables deployment, such as securing transmission grid connections, must urgently be addressed to stay on track,” it says.

Little progress has been made on energy efficiency, the report states, and a concrete plan for delivering the improvements is required. “While the government has set targets for decarbonising heating, these are not backed up by policies of sufficient scale to deliver the desired outcomes,” it says. “Key policies remain missing, and government funding is insufficient to deliver the required change.” It says that these challenges must be urgently resolved to meet the Sixth Carbon Budget.

Flood resilience

Government investment in measures to reduce the risk of flooding has doubled, in line with recommendations from the NIC. Nevertheless, “government has yet to specify measurable long term targets for flood resilience. Until it does so, policies and investment are unlikely to fully address the flood risk challenges the Commission identified in the first Assessment”.

The NIC released a report on surface water flooding in 2022 that found that over 3M properties are currently at risk from it. This could increase by 10% in the coming years. The NIC says that the government needs to better identify the places most at risk and devolve funding into local areas at the highest risk. It is expected that the government will respond to these recommendations this year.

Water

The NIC has already called for the government to find ways to reduce demand for water while increasing supply, in order to increase the country’s water resilience. It has called for “ambitious targets for leakage reduction, compulsory smart metering, the creation of additional supply and a national water transfer network.”

To meet the ambitions on supply, the NIC believes that there will need to be at least 12 water related nationally significant infrastructure projects consented by 2030 – “so it is critical that the planning system is fit for purpose and progress is made rapidly”.

Digital

There has been genuine commitment to improving digital connectivity across the country, reflecting significant increased investment from operators in recent years. The government must set out a clear vision for 5G mobile networks in its upcoming Wireless Infrastructure Strategy.

Waste

The NIC believes that the government “must do more to increase waste recycling rates”. Despite having clear overall targets on recycling and waste reduction, these rates have stagnated since the mid-2010s. “Unless clear rollout plans are now put in place, these recycling targets will be missed, and the sector will remain a major source of carbon emissions,” it states.

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