Infrastructure is never far from the news or the political agenda of late. In June, we saw parliament give the green light to a third runway at Heathrow and on the same day, the government rejected plans for the £1.3bn Swansea Tidal Lagoon.
Both of these decisions highlight a challenge facing the infrastructure sector in 2018 – politics. Although this challenge is not new, it is heightened in the wake of the Brexit vote and the uncertainty around what post-Brexit Britain will look like.
Heathrow expansion was voted through by parliament but opposed by the Opposition front bench. This was followed up with a suggestion by the shadow chancellor that a future Labour government could stop the project getting off the ground.
In January 2017, Charles Hendy published his final report recommending the go-ahead for Swansea Bay Tidal Lagoon. Almost 19 months later the government rejected the project, leading to industry-wide condemnation.
So, what does this all mean for the future of Britain’s infrastructure? Earlier this month DLA Piper published the results of a study it conducted into investors’ attitudes towards infrastructure in the UK. The headline finding was that 70 per cent of investors claimed that they had been put off making infrastructure investments because of politically induced uncertainties and delays, describing decisions such as the third runway at Heathrow as too politicised.
The study found that an overwhelming majority suggest giving more power to the National Infrastructure Commission (NIC) to propel projects forward, rather than just offering advice and recommendations.
The NIC will publish its first National Infrastructure Assessment (NIA) next week, setting out a strategic vision for the next 30 years and providing recommendations for how the nation’s infrastructure needs should be met.
The purpose of the Commission and the NIA is to, in theory, bring a degree of certainty to and reduce the politicisation of infrastructure in the UK. With Brexit looming, only time will tell. The first big test will be if the government accepts the recommendations of the NIC.
Copper will be covering the release of the NIA next week – keep an eye on our social media for details.