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“It is clear to us that the Coalition Government recognises the importance of continued investment in our transport, energy, waste and water infrastructure - in underpinning a growing and low carbon economy as well as improving our quality of life,” he said. “The placing of infrastructure at the heart of the plan for growth, the launch of the UK’s first ever National Infrastructure Plan and the retention of Infrastructure UK within the Treasury are testimony to that and show real progress.
“Government must now focus on translating these positive steps into clear actions that pave the way for infrastructure to improve our long term economic performance. The second edition of the National Infrastructure Plan will provide an ideal vehicle. It must set out the priorities for essential UK infrastructure, the long-term investment needs and how potential barriers to securing private investment, such as aspects of the planning system, will be addressed. This will be especially important for the decarbonisation of the energy sector, one of the biggest challenges for the coalition going forwards.”
He spelt out actions now required by sector. The government estimates that £200bn will need to be invested in the nation’s infrastructure over the next five years, with an aspiration for more than 70% to be delivered through private investment. “The need for Government to unlock multiple funding sources to raise sufficient capital is becoming ever more pressing,” he said. “The Green Investment Bank carries the potential to act as one of the core funding streams, but it is crucial that Government demonstrates continued commitment to the principle of a ‘bank’ with powers to borrow, not a fund.”
For energy, There is a very real danger of demand outstripping supply in the energy sector without prompt action from government to shore up the regulatory and investment markets to encourage industry to deliver new low carbon energy generation, he said. “Government must deliver a robust energy market reform that reduces the risk for investors, leaving no doubt of its commitment to facilitating the decarbonisation of the sector. A crucial part of this will be setting an effective level for the carbon floor price for 2013 and beyond, such that it will drive the major investments needed in wind, marine and carbon capture and storage technology to prevent future shortfalls.”
The retention of a fast-track system for nationally significant infrastructure is reassuring, said Foulkes. “However, concerns remain about the implications of the Government’s localism agenda on ‘larger than local’ projects. In particular, clarity is needed on how the ‘duty to collaborate’ will be monitored to ensure effective collaboration between local authorities in planning and delivering local energy, waste, water and transport projects that are often key to unlocking regional growth. There should also be careful consideration of how proposed changes to the Community Infrastructure Levy, which will restrict which projects can be funded and allow the levy to be used for revenue funding, may impact on how local authorities finance significant infrastructure projects.”
In a world driven by carbon reduction and global competition for resources, the UK waste industry must evolve from a disposal sector into a ‘supply’ sector that unlocks the real value of waste, in a low carbon fashion, said Foulkes. “Future waste targets and incentives must focus on the quality as well as the quantity of recycled materials to ensure they can return to and benefit the economy as first rate, saleable goods. Waste infrastructure must also be adaptable to the changing demands that will be placed on it, including the move away from diverting waste from landfill towards energy and materials security. A further £10-20bn investment is required over the next decade to upgrade waste infrastructure therefore Government must develop new thinking on how investing in waste facilities can be made attractive to the private sector. The long awaited waste policy review for England presents an opportunity to address these issues that shouldn’t be missed.”
The UK has an enormous programme of infrastructure work to deliver in coming years and needs a highly skilled workforce to deliver it, said Foulkes. “Although efforts have been made to end the ‘stop-start’ approach to procurement planning and encourage skills growth through provision of more apprenticeships, further action is needed to provide certainty around the UK’s long-term infrastructure delivery programme to encourage industry to make future investments in skills development programmes.” The government must also implement a robust system to monitor registration for degree courses when the fees increases take effect and be ready to take action if up-take falls, especially for masters level engineering programmes which are the benchmark standard for chartered engineers across Europe, he said.
For water, the ICE said that 20 years of regulatory-driven investment has meant that the nation’s water infrastructure is serving its customers well and is mostly in good condition. “Government must reform the regulatory regime in order to drive the long-term investment necessary to address climate change, population growth and overall water infrastructure sustainability. It must also put an end to ‘stop-start’ investment.”
In transport, ICE welcomed the commitment to rail electrification, investing in additional carriage capacity and the consultation on the preferred route for High Speed Rail. “The review of aviation policy is also welcome but disappointingly there is still no easing of the government’s opposition to additional runway capacity at south east airports, despite the need for alleviating capacity constraints remaining compelling.” Road congestion is set to remain a problem for the coalition government and the case remains for a demand management scheme, he said. “ Deteriorating local road conditions, exacerbated by the extreme winter weather, will also prove an ongoing challenge with the number of potholes over the last year tipping the two million mark, leading to record road repair bill of £10.7bn. The extra £200mn Government has made available will not make much of a dent in the annual budget deficit or equate to much when spread across the many authorities.”
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