A clear path to meet the UK’s long-term infrastructure needs
The Second National Infrastructure Assessment spells out the country’s priorities – and investors will have to provide more than half the money.
The latest assessment report by the National Infrastructure Commission (NIC) – five years after its first one - sets out a clear path to meet the UK’s infrastructure needs. It says that private sector investment will have to increase from £30-40 billion over the last decade to some £40-50 billion in the 2030s and 2040s, on top of a sharp increase in public sector investment to around £30 billion per year.
What’s given more, given the increasingly fierce global race for private capital, the UK will need to take a new approach to attracting infrastructure investors. The NIC report calls for policy stability, including a clear plan and sticking to it; regulation that is pro-investment; and speeding up planning, particularly for energy transmission.
“The Government took the forward-thinking step to create the NIC,” says GIIA chief executive Jon Phillips. “Now it must listen to the impartial expert advice it has provided. The plan is achievable and affordable if the right decisions are made as a matter of urgency.
“The private sector will need to provide more than half the investment needed over the next 20 years. Whoever forms the next government must adopt this blueprint and put it into action.
“And as a matter of urgency, place a higher priority on making the UK a more attractive destination for investment, in order to attract the hundreds of billions of pounds that are available in what is a highly competitive international market.”
Pulse surveys of GIIA members over the last year clearly show the relative attractiveness of the UK market to infrastructure investors has fallen thanks to political instability and an unattractive regulatory regime, and we have provided both parties with a set of recommendations designed to restore UK reputation.
GIIA has this year engaged frequently with both Conservative government ministers and with Labour opposition spokespeople, ahead of a General Election in 2024, to impress upon them the need for change, including a stronger role for the NIC and an urgent updating of the National Policy Statements that guide the planning process for Nationally Significant Infrastructure Projects.
In a news article in the Financial Times (paywalled content), GIIA’s Jon Phillips warned that private investment on the scale required was unlikely to happen without a “clear and stable policy environment”, adding that for “global infrastructure investors, the attractiveness of the UK as a destination for private capital has fallen since last year to an all-time low”.
GIIA looks forward to the Chancellor’s Autumn Statement on 22 November as an opportunity for the Government to set out new measures that will better attract investors to UK shores, in the face of increasing global competition for private capital from the United Sates and European Union.