Ben Heatley, Managing Partner at Copper consultancy looks ahead at the major infrastructure trends that may come to pass this year.
Thank goodness 2021 has come to an end, and roll on 2022.
It was a challenging year. We’ve all had to live with the impact of Covid-19 for far too long, and thankfully we can now say with confidence that it’s finally behind us. No more working from home, loads of healthy face to face interaction, and no more talk of who did or didn’t do what at Christmas parties…
……. erm, sadly it doesn’t look as though that first prediction is going to come true. Sorry.
We continue to live in tumultuous times, and as such my greatest piece of advice is please treat all predictions in this blog with a healthy dose of skepticism. Covid is continuing to confound our expectations, as just as we think the pandemic is under control, the virus squirms free once more.
And Covid isn’t the only socio economic or political storm on the horizon. The supply chain crisis, staffing shortages in essential industries, slowing economic growth and rising inflation – particularly in energy prices, and political instability within the Government all suggest that we could be in for a bumpy start to the year.
Anyone who tells you that they know what will happen this year, is either over confident or under informed. Despite my better judgment, I am going to try to make a few predictions of key themes that may emerge in our industry in the year ahead. Just don’t hold it against me if they don’t come true.
Covid won’t go away…yet
Here’s an easy one to begin with. It’s clear that despite everyone’s best efforts, we are not through with Covid, or more accurately Covid isn’t through with us. It will almost certainly have some impact all our working and personal lives for the first half of this year and maybe longer. In the short term it’ll mean more working from home, collaborating virtually and reinforcing precautions around hands, face, space. But the longer term outcome may be that we learn to live with the disease, within the confines of the ‘new normal’, and that new status quo could impact everything from transport and energy demands, to housing needs.
Levelling-Up and levelling out
The Government will 100% meet their revised deadline of publishing the Levelling-Up White Paper in January…or at least February. Almost certainly.
When the much awaited document is released, it could introduce sweeping changes to structures of local government, along with setting demanding targets to improve outcomes in health, housing, crime and economic opportunity, which will influence the approach to every area of infrastructure. Even ahead of the publication, it’s clear that the Government is getting serious about Levelling Up and investment, policy and planning decisions will be increasingly influenced by it.
The birth of the ‘Govian Era’ of planning
We are all familiar with Georgian architecture and Victorian infrastructure. We should now brace ourselves for the coming Govian era of planning, as Michael Gove makes good on his promise to deliver substantive change. The Planning White Paper has been postponed, and it’s hard to predict what it will contain when it comes back, but it’s reasonable to assume that it will reinforce wider Levelling-Up ambitions and reflect Michael Gove’s aspirations to be a reforming force in British politics.
UK, the Saudi Arabia, or perhaps more like the Denmark of low carbon energy
The pace of transformation of the UK’s energy system looks set to accelerate in 2022. Major offshore wind auctions will reach new stages in Scotland and Wales, we are starting to see a boom in solar energy projects as they help to bridge the gap between gas and large scale wind, and there will gradually be a comeback for onshore wind – hopefully. Meanwhile 2022 looks set to be the year that small modular reactors and hydrogen based industrial clusters finally get going in a meaningful way.
All of the predictions so far will be subject to change. Covid and its aftermath will impact our industry, but it’s hard to predict how much. The Government will drive political priorities that will shape the decision making and policy framework, but the makeup of the government could change dramatically, with Boris Johnson under increasing pressure from within his own party. Energy transition could be hit by significant political upheaval, shifts in demand, or economic pressures, as the UK seems to tread a tightrope between consumer prices and net zero transition.
Despite that uncertainty, it’s hard to anticipate that the infrastructure sector will do anything but grow this year. The roll out of sustainable integrated transport, net zero energy systems, and resilient water systems that can cope with climate change, will require enormous investment, and time is rapidly ticking by. Add in the vast amount of social infrastructure required to make good on Levelling-Up and the scale of the task is enormous.
Economics will also play a key role in driving expansion. The UK’s GDP growth is stalling and productivity is far lower than it could be. To address these issues simultaneously will require concerted public and private sector effort and spending on infrastructure is one of the few levers the Government can reliably pull.