Will the National Infrastructure Commission unlock our potential?
The National Infrastructure Commission (NIC) announced at the Conservative party conference will be headed by Labour peer Lord Adonis and has its work cut out. On the face of it, the National Infrastructure Pipeline issued in July makes for some impressive reading. The Pipeline is currently valued at £411 billion, covering projects in Energy, Transport, Flood Defence, Communications and Water, with average spending expected to be around £48 billion per year over the next 5 years.
Over 60% of the pipeline is funded by the private sector, with 90% of the total covered by only 2 sectors (Transport and Energy). With the planned pooling of 89 local authority pension funds in England and Wales into six regional funds, and the dissolved spending power being given to Local Authorities through the retention of business rates, in the hoped that this will also encourage local authorities to also invest in infrastructure projects. All very impressive stuff. The NIC’s challenge will be to ensure that we are investing enough in our infrastructure and that the investment is being directed as effectively and as efficiently as possible?
One of our biggest issues has been that nationally important strategic infrastructure are kicked around like a political hot potato. An ideal example of this is the on-going arguments about the results of the Davies Commission on additional runway capacity in the southeast. Whilst it is understandable that the Mayor of London and Greater London Authority are unhappy with the conclusions reached, it is not helpful that after over 2 years of research, political bodies seek to undermine the work of the Commission when they are not happy with the conclusions of an independent body, appointed for that very reason – to independently assess all information subjectively in the hope of determining the best outcome for all.
The news that the NIC will initially focus on London and its transportation linkages is also very welcome, as London is at a critical turning point. Its position as a global power is being placed at risk by uncertainty over the UK’s role in Europe, and its creaking infrastructure. London is responsible for almost 25% of the UK’s GDP, and a recent report highlighted that by 2035, the city is projected to generate a tax revenue surplus of £159bn per year1! However, anyone who commutes into London knows the capacity constraints in which the current rail network is operating within, with significant bottlenecks at Waterloo, Euston and Liverpool Street, and how costly disruption can be to business.
Providing London with the necessary headroom to fulfil its growth potential is critical to securing the UK’s continued prominence on the global stage. London’s population is expected to reach 10 million by 2030, and 11 million by 2050. That’s equivalent to the entire population of Greece, Portugal, Sweden, Hungary, or the Czech Republic! Yes, investment is on-going with works progressing on CrossRail 1, Thameslink and the Tube upgrades, but these investments will only temporarily relieve congestion, and with population growth and hopefully additional airport capacity, further investment is needed and quickly.
CrossRail 2 will be a critical component of this investment. The proposed 36km twin bore underground rail route between Wimbledon, Tottenham Hale and New Southgate will provide greater connectivity across London, increasing the capacity of the network by 10% and unlocking development potential for up to 200,000 homes in areas such as the Upper Lea Valley. A clear commitment to the project is therefore needed now, in order for the project to be designed and planned, ready for construction to start in the early 2020s. At a cost of c£27 billion, this is no light undertaking, and it’s a tortuous process. In July, the Mayor announced the creation of the Crossrail 2 Growth Commission, and a public consultation will begin shortly to provide more information on the project, including locations for work sites and station entrances. Time will only tell whether the NIC will be able to step above the political point scoring, and start to develop a more streamlined decision-making process that will unlock our infrastructure potential and help the UK to retain its global position. But time is a luxury we may not have!
1 London Finances and Revenues, Centre for Economic Business Research