Spending Review and National Infrastructure Strategy should make it easier for the private sector to invest in transport infrastructure
There's a key message coming out of the Spending Review and the National Infrastructure Strategy (NIS): the UK government wants to level up the economy and make it greener. Any project that meets either or both of these policy priorities is likely to get government backing.
The DfT's priority outcomes for its Spending Review settlement (which includes a £700 million cash increase in core resource funding from 2020-21 to 2021-22, delivering a 13.8 per cent average real terms increase per year since 2019-20) are:
- Improve connectivity across the United Kingdom and grow the economy by enhancing the transport network on time and on budget
- Tackle climate change and improve air quality by decarbonising transport
- Build confidence in the transport network as the country recovers from Covid-19 and improve transport users’ experience, ensuring that the network is safe, reliable, and inclusive.
The revised Green Book, published alongside the Spending Review, is designed to ensure that project appraisals focus on how a proposal will deliver the government's policy ambitions, rather than focusing on a benefit cost ratio (BCR) that does not fully reflect social policy objectives or local strategies. This will enable ministers to make better-informed decisions.
The NIS goes into more detail about how the UK government will support private investment into infrastructure: there is a whole chapter on it. In response to the Infrastructure Finance Review carried out last year, the government's approach to private investment includes providing long term policy certainty, directly co-investing alongside the private sector and acting as a cornerstone investor on key projects through a new National Infrastructure Bank. This is welcome news for would-be transport infrastructure investors as the MLP process never really took off.
Infrastructure project delivery is being improved, building on the work of the Project Speed taskforce set up in summer. The mantra is "better, greener, faster": assessing the wider economic, social and environmental benefits using the revised Green Book methodology; embedding net zero requirements into every stage of the project cycle; and simplifying and shortening the planning and procurement processes.
Let's hope that this clearer policy direction, together with an improved and streamlined project delivery process, opens the way to more much-needed private investment in transport infrastructure.