Welcome spending plans should "support a more stable national infrastructure planning cycle"

The Commission responds to the latest Budget and Spending Review.

Published: 27 Oct 2021

By: Ben Wilson

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Responding to today’s Budget and Spending Review, Sir John Armitt, Chair of the National Infrastructure Commission, said: “With reasonable capital settlements for key areas including local transport outside London, and an increase in the guidelines for projected infrastructure spending for the long term, these announcements indicate a government keen to support a more stable national infrastructure planning cycle. In the current fiscal context, today’s red box contains a solid down payment on a long term fiscal commitment to infrastructure.”

Local transport funding for cities and towns

Sir John said: “Confirmation of plans to devolve more funding to city regions for major upgrades of their transport systems is of course welcome. Addressing congestion and improving connectivity across cities is key to boosting productivity but also improving quality of life for residents. But this funding should only represent a first step and mayors need to know they can rely on future five year settlements to enable long term planning.

“Other local authorities, particularly those covering one or more towns, also need the opportunity to develop their own growth strategies and need greater certainty of funding to plan infrastructure projects. Today’s announcement of additional funding for local transport beyond London and other big cities is significant, and broadly in line with the Commission’s recommendations. This money should be devolved to county and unitary authorities in the same way as it is to metro mayors. The forthcoming white paper is government’s chance to show it is willing to let ‘levelling up’ be a collaborative endeavour with local leaders rather than a set of priorities imposed from Whitehall.”

Integrated Rail Plan

Today’s announcements do not include the Integrated Rail Plan, a policy document due to set out how HS2 phase 2b and other major rail projects in the north and midlands will work together to bring forward benefits. Government has said this will be published shortly. The Commission published its Rail Needs Assessment for the North and Midlands last December to inform this Plan, at government’s request.

Sir John comments: “Ongoing uncertainty hanging over major rail schemes in the north and midlands is not in anyone’s best interest, not least because of the timescales involved in taking such large projects from aspiration to delivery.

“We gave our own independent assessment of options to government ten months ago. The government’s plan should be published without further delay to help unlock economic growth across the north and break the cycle of committing to schemes only to later reopen or rescope them.”

Role of the Commission and future work programme

Alongside the Budget, HM Treasury has published a revised Framework Agreement setting out the Commission’s role, which includes the addition of a new objective “to support climate resilience and the transition to net zero carbon emissions by 2050” and a responsibility to consider how the Commission’s recommendations contribute to government’s legal target to halt biodiversity loss by 2030.

HM Treasury has also revised the “fiscal remit” given to the Commission, an envelope within which our recommendations must be funded. In 2016 the then Chancellor set public investment in economic infrastructure of 1.0 – 1.2% of GDP in each year between 2020 and 2050, and this has now been increased to 1.1 – 1.3% of GDP for 2025 – 55. This new spending envelope will inform the Commission’s approach in the second National Infrastructure Assessment, due to be published in 2023.

Sir John comments: “We are also pleased that the Chancellor has increased the funding envelope within which the Commission formulates its recommendations. The fiscal remit ensures our work is grounded within a realistic fiscal context and helps ensure our independent policy recommendations are adopted. Raising the ceiling on the remit in this way could represent billions of pounds of extra funding for infrastructure over the long term.”

“From our proposals on increasing renewable energy generation to enabling the end of the sale of petrol and diesel vehicles, the Commission’s recommendations have always reflected the importance of moving to a low carbon economy. We are pleased that this objective has now been made explicit. Infrastructure will play a crucial role in achieving net zero by 2050 and protecting biodiversity, and the Commission stands ready to advise government on the necessary decisions ahead.”

Government has also today announced that it has asked the Commission to undertake a study on reducing the risks of surface water flooding.

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