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Infrastructure policies and investment

Published Tuesday, July 10, 2018

This note examines the current state of infrastructure in the UK, recent Government policies and levels and sources of investment.

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This note examines the current state of infrastructure in the UK, recent Government policies and levels and sources of investment. 

The National Infrastructure Commission published the UK's first National Infrastructure Assessment in July 2018, It contained the following recommendations:

  • Low carbon energy – making a switch to low-carbon and renewable sources for both the country’s power and heating, combined with a move towards electric vehicles, would mean the customer of 2050 would pay the same in real terms for their energy as today
  • Digital technology – that the Government devise a National Broadband Plan by Spring 2019, to deliver full fibre connections across the whole of the country, including those in rural areas – this should ensure that the technology is available to 15 million homes and businesses by 2025, 25 million by 2030, and all homes and businesses by 2033
  • The future for the nation’s roads – that the Government work with councils and private companies to deliver a national network of charging points for electric vehicles and ensures that the impacts of connected and autonomous vehicles are taken into account when planning for the next rail control period and road investment strategy;
  • Encouraging growth of cities – that Metro Mayors and city leaders develop and implement long-term strategies for transport, employment and housing in their areas, to support economic growth, with new powers and devolved infrastructure budgets.  The National Infrastructure Assessment’s spending plans include funding for projects including Crossrail 2 in London, and Northern Powerhouse Rail linking the major Northern cities, and recommends a boost in funding for major cities totalling £43 billion to 2040, with cities given stable five-year budgets, starting in 2021;
  • Tackling floods – that the Government should put in place a long-term strategy to deliver a nationwide standard of flood resilience by 2050 with funding for flood risk management increasing significantly over the coming decades
  • Cutting waste – that new national rules for what can and cannot be recycled be introduced, with restrictions on the hardest-to-recycle plastics, aimed at increasing rates and reducing the amount of plastics going to incinerators.  This would also mean that all food waste is separated making it available to create biogas, so it can be used to heat people’s homes and potentially as a transport fuel

Current state of UK infrastructure

The UK was ranked 11th the in the world in terms of the overall quality of its infrastructure in 2017/18, behind Germany (10th), France (7th) and the USA (9th), according to the World Economic Forum.

However, UK spending on infrastructure has been below that spent in some other G7 countries over the past decades.

Spending on infrastructure

The ONS estimates that public sector infrastructure spending totalled £16.2 billio in 2015, and private sector infrastructure investment tottalled £15.4 billion.

The public sector mainly invests in transport infrastrucutre, whilst the private sector mainly invests in energy infdrastructure.

Government policy

The Government argues that a higher level of investment is needed in the UK. This note outlines some of the measures that the Government has taken to increase and deliver infrastructure investment, including:

  • the National Infrastructure Commission
  • the National Productivity Investment Fund
  • Pension fund reforms
  • PF2
  • UK Guarantees Scheme

 

 

Commons Briefing papers SN06594

Author: Chris Rhodes

Topic: Economic policy

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