Going to plan

The Prime Minister launched the UK’s first ever infrastructure plan at last week’s CBI conference. Angus Walker looks at what it means for the planning arena.

On Monday, the government published the first edition of a 'National Infrastructure Plan'. Hosted as it is on the Treasury website and produced jointly by the Treasury and Infrastructure UK, this plan focuses on investment in infrastructure rather than infrastructure planning. Nevertheless it contains some useful information about the latter.

The authorisation regime under the Planning Act 2008 covers energy, transport, water and waste projects. The National Infrastructure Plan (NIP), covers a wider set of categories, also dealing with digital communications (which are part of infrastructure planning in Scotland) and science, research and innovation, which are less obviously related to infrastructure, but perhaps there is nowhere else to put them.

The NIP draws heavily on last week's report on the Comprehensive Spending Review, which it says for the first time assessed the infrastructure that the nation needs. I would have thought that the November 2009 draft National Policy Statements went some way towards that nearly a year ago, albeit only in the fields of energy and ports.

Infrastructure investment will be considered in a three-part hierarchy, which is not such good news for large new projects. The first priority is the maintenance and smarter use of existing assets, then tackling stress points to improve resilience and capacity of networks, and only then are 'transformational large scale projects' considered.

There will be some sale of assets to help fund the Green Investment Bank – part of the radio spectrum, the High Speed 1 railway, Royal Mail, and possibly NATS (air traffic control) and student loans (to be decided in next year's budget).

The NIP states that investment by the private sector is to be preferred, but government intervention is necessary when there are high social or environmental costs involved, high risks, and yet the infrastructure is in the national interest. By social and environmental costs presumably it does not mean that the projects would be socially or environmentally damaging, but would cost a lot to prevent such damage.

There will be several new(ly packaged) sources of funding available. The Green Investment Bank will be capitalised with £1bn and more from the privatisations mentioned above, a Regional Growth Fund will be given £1bn rising to £1.3bn, and local transport schemes will have two funding streams available (see below). Local growth will be dealt with in a forthcoming white paper, and tax incremental financing (TIF) is to be introduced (borrowing against future increases in rates caused by the existence of the project).

The NIP is fairly positive about the Planning Act regime – instead of talk of scrapping the Infrastructure Planning Commission (IPC), the tone is of “building on” the regime by replacing the IPC with the Major Infrastructure Planning Unit. There is some delay, though – the revised route map on the remaining roll-out of the regime is now expected “by the end of 2010” instead of “later in the summer”, and the Waste Water National Policy Statement (NPS) has been put back a year to autumn 2011. The other NPSs are not mentioned.

Area-specific measures

In the field of energy, the priorities will be to improve energy efficiency, build nuclear power stations and offshore wind farms, prioritise biomass, carbon capture and storage, solid recovered fuels, anaerobic digestion, and microgeneration and renewable heat projects; smart metering, greater electricity connection with Ireland and mainland Europe, and private sector investment in LNG terminals and gas storage.

In the field of transport, the priorities will be removing bottlenecks, mainly on the road network, managing existing assets better such as motorways and airports, improving efficiency in the Highways Agency and rail industry, and developing ports; decarbonisation of cars, rail projects; £1.5bn for local authority major transport schemes (£900m on new schemes, £600m on committed schemes); £560m for smaller local authority projects outside London (the Local Sustainable Transport Fund), and a reduction of grant streams from 26 to four.

In the field of digital communications, the priority will be to encourage private sector investment in superfast broadband and high-speed mobile broadband.

In the field of water and waste, the priorities are encouraging investment in assets by water and sewerage companies, reducing the threat of flooding and coastal erosion, reducing waste through more sustainable products and materials, diverting biodegradable waste from landfill, and harnessing energy from waste.

Angus Walker is a partner at Bircham Dyson Bell. To read more of his planning blog, click here. Angus can be contacted on 020 7783 3441 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..

To-do list

There is a huge list of next steps and forthcoming publications throughout the document, summarised on pages 39-41. Here is a summary by date.

Late 2010

• Consultation on reform of electricity markets
• Details of process to replace the IPC
• Updated timetable for remaining National Policy Statements
• Local Growth White Paper
• Introduction of Localism Bill, which will "radically reboot" the planning system and introduce a national planning framework
• Government response to Penfold review of non-planning consents
• Infrastructure UK report on why infrastructure is more expensive in the UK than elsewhere
• Common set of principles of economic regulation published
• Report on low carbon construction
• Proposals for reform of climage change levy
• Consultation on flooding and coastal erosion strategy
• National Broadband Strategy
• Electricity market reform

Spring 2011

• Design and testing for a Green Investment Bank
• Report on extending 'regulatory asset base' model of project financing (where costs recovered from consumers)
• BIS report on barriers to innovation and infrastructure supply
• Treasury programme on improving economic infrastructure data
• Green Book Supplementary Guidance no assessing economic infrastructure
• Engineering and Interdependency Expert Group to report on systemic risks and opportunities in infrastructure
• Expert Group will also address cyber security and climate change adaptation
• McNulty review of rail industry efficiency to be presented to the government
• Complete review of Ofwat

Summer 2011

• Review whether further cross-sectoral reform of economic regulation is required
• Levels of 2022-27 carbon budget
• Review of government waste policy
• Complete review of Ofgem
• Water White Paper

Late 2011

• Annual energy statement
• Updated version of the National Infrastructure Plan
• Publication of common set of planning assumptions (e.g. population growth, climate change effects)
• Publication of waste water NPS

2012

• National Climate Change Adaptation Plan
• Climate Change Risk Assessment