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We need long-term investment in critical national infrastructure

From the UK’s energy grid to its waterways and transport systems, the government must make concrete plans for steady investment.

By Charlie Hodgson

Infrastructure is the bedrock of the UK economy. From the movement of people and goods via our transport networks, to the delivery of power, water and food through our energy grid, waterways and supply chains, it is a key national enabler, and we wouldn’t have a functioning society without it.

Aside from its crucial role in keeping the country running, infrastructure also has a vital part to play in ensuring equitable distribution of growth. It is essential to driving sustainable employment opportunities across the country. For instance, the transition to net zero is predicted to create 1.2 million UK jobs by 2050 in the low-carbon and renewable energy sectors alone.

Historically, the UK has seen sustained investment in its infrastructure; in 2019, the World Economic Forum ranked it 11th out of 141 countries in terms of infrastructure quality. But in recent years investment has slowed and our systems are ageing. There has also been a lack of preparation for macro challenges facing the UK, such as population growth and climate change.

This is why the government must lay out a long-term vision for infrastructure, with a detailed five-year plan covering multiple sectors, including transport, utilities and general infrastructure. The UK’s processes for upgrading and building major infrastructure have become overly convoluted and short-termist – we need a new, detailed and future-facing vision, which can give the private sector the certainty it needs to invest.

Climate change in particular signals our need for better, stronger infrastructure and to make changes to the way we use it. Electrification and digitisation are essential for bringing down carbon emissions and reaching net zero, while the growing extremity and frequency of extreme weather events mean the UK also needs to improve its climate resilience and adaptation measures.

Infrastructure growth is core to this. As global temperatures increase, we will need to adapt to longer, hotter periods that can impact infrastructure performance, increase water scarcity and affect farming. We must improve our flood defences and water drainage systems to cope with higher frequency and volumes of rain, and increasingly violent storms caused by rising temperatures. Much needs to change to improve our ability to cope with global warming.

There has been long-term consensus that investment into UK infrastructure is crucial to growth. But recently, it seems that public spending on major infrastructure projects has worryingly begun to slip. In 2022, the Northern Powerhouse Rail project was scaled back, retracting the promised new rail line between Leeds and Manchester, and in 2023, HS2 Phase 2 was also cancelled. As a result, it’s going to be difficult over the next five to ten years for the infrastructure sector to continue to push for the public and private investment it so desperately needs to improve, maintain and replace the UK’s transport assets.

Another roadblock is how long it currently takes for decisions on major infrastructure to make it through the planning system. The time it takes from a decision being made on renewal or refurbishment, to a project “coming on-stream” or being fully operational, is getting longer. Numerous governments have launched planning reviews, declaring their intention to “cut the planning red tape” and make consenting easier.

But often – after being put through consultations and extensive scrutiny – planning applications find themselves with more hurdles than they had to begin with. We have seen this most recently with new provisions for nature, including a requirement for developers to ensure at least 10 per cent biodiversity net gain from February 2024 on infrastructure projects. Layering on more and more conditions and requirements, while justifiable in themselves, can make it more difficult to get consent and result in significant delays. Not only does that lengthen the project itself and increase costs, but those opposed to new developments have more opportunities to challenge the process as well.

This has impacted strategic investment into road infrastructure, where groups opposed to planning decisions have regularly lobbied via local MPs or utilised the judicial review process, leading to significant delays to schemes and therefore to vital road improvements.

Volatile politics on a national level also exacerbates the situation. In recent years we have seen significant constitutional and political change in the UK, linked to Brexit, the Covid-19 pandemic and the resulting economic downturn, exacerbated by the energy crisis. Given the number of changes in government ranks, not least in No 10, the government decision-making cycle has grown shorter and shorter, often removing long-term policy support for big schemes and reducing the gestation period for the delivery of large infrastructure projects. It can be difficult for such schemes to survive as a result. Businesses and investors need certainty if they are to back major schemes, but the current landscape can prove very difficult to respond to.

Funding for infrastructure comes from a range of sources, but a great deal of it originates in the private sector. Without market stability, it can be very difficult for private investors to put large sums of money into fixed assets that will only offer a return on a 25-year horizon. Owing to recent events, such as the cancellation of HS2 Phase 2, the UK’s credibility on infrastructure development isn’t as high as it once was. The UK used to be a safe bet for investors, but this unfortunately isn’t the case anymore.

This is why we so urgently need a long-term strategy for UK infrastructure. Producing it based on cross-party consultation would enable it to be delivered consistently through changes of government. Political commitment to long-term, concrete plans will give businesses the certainty they need to invest in major infrastructure projects, harnessing the private sector to deliver vital upgrades in the years to come. The UK’s resilience to climate change, its economy and the future of our communities all depend on it.

[See also: If given the chance to succeed, levelling up could transform the UK]

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