UK Government publishes ambitious 10 Year Strategy for Infrastructure

This summer, the UK government published its 10 Year Strategy for UK Infrastructure (the ‘Strategy’), setting out the government’s plans to revive the UK’s infrastructure, prioritise economic growth and support social development.

A Record Investment Commitment

The Strategy promises a transformation of the nation’s infrastructure with an unprecedented £725 billion funding commitment over the next ten years. The funding is intended to provide stable and predictable spending, allowing both the government and industry to plan ahead and ensure more efficient delivery of projects, attract private sector investment and ultimately boost the UK economy.

What Does the Strategy Commit To?

Whilst previous governments have published similar strategies to cover economic infrastructure, this Strategy is the first to also include commitments relating to social and housing infrastructure, reflecting the Labour government’s prioritisation of these areas. Of particular note within the Strategy is the government’s commitment to:

• deliver 1.5 million new homes within the current Parliament;
• commit £39 billion to the government’s Affordable Homes Programme;
• progress work on the Lower Thames Crossing – a planned road crossing of the Thames estuary that would link Kent and Essex;
• deliver rebuilding projects at over 500 schools;
• deliver 35 new hospitals;
• build three new prisons;
• create nine new water reservoirs – an important move given the ongoing issues with the UK’s water supply;
• invest in clean energy and support renewable energy projects, nuclear power and hydrogen infrastructure. This is in keeping with the government’s goal to generate enough clean electricity to meet the UK’s total annual electricity demand by 2030.

How will the government achieve these commitments?

In addition to the commitments noted above, the new Strategy aims to improve the delivery of infrastructure more generally by:

• reforming institutions – the government will establish a National Infrastructure and Service Transformation Authority to integrate infrastructure policy, strategy and delivery into central government and ensure delivery is more effective by developing stronger partnerships with the private sector;
• providing certainty, confidence and stability – through the commitment to £725 billion for infrastructure over the next decade, ensuring that capital funding grows in line with inflation and creating certainty in the sector. This is bolstered by the government’s launch of the Infrastructure Pipeline digital portal to provide comprehensive information on publicly funded infrastructure projects to provide businesses with certainty and give them the confidence to invest in skills and technology to help deliver the government’s commitments;
• removing barriers to delivery – the government has committed to taking forward “the most ambitious planning reforms in a generation”. The measures in the Strategy are supported by the government’s Planning and Infrastructure Bill and its commitment to fast track 150 planning decisions relating to major infrastructure projects during this Parliament. The government has also committed to reforming public procurement in the construction sector in order to ensure it is more aligned with commercial realities and to drive up investment.

How will stakeholders respond to the Strategy?

The Strategy places a great deal of emphasis on the role of local authorities in helping to meet the government’s infrastructure commitments, particularly in relation to housing, transport and social infrastructure. The Strategy expects local authorities to ensure that their approach to delivery of such infrastructure projects recognises national priorities. This may place an additional burden on local authorities who are already facing resourcing issues.

Local authorities and particularly elected members of such authorities may encounter difficulties in trying to reconcile overarching national objectives (as set out in the Strategy) with the specific interests of local communities. This is particularly the case where large scale infrastructure projects may meet a national need but not be welcomed by local communities.

The Strategy does however present additional opportunities for local authorities in that it allows them to access new funding and offers opportunities to create partnerships with public bodies and the private sector, therefore driving up long term investment in infrastructure.

Significant investment from the private sector is required in order to advance the government’s ambitious infrastructure initiatives. Delivery of key infrastructure projects is likely to rely heavily on structured approaches like public-private partnerships and utility regulation. Encouragingly, the Strategy’s focus on strengthening UK supply chains through a centralised system and digitalised portal may motivate investors by building a robust UK-based network for infrastructure-related technologies and services.

For investors, the presence of defined timelines for delivery within the Strategy, as well as complimentary government initiatives for delivery of infrastructure through, for example, the Planning and Infrastructure Bill, enhances confidence in delivery and increases the appeal of investing.

There remain however a number of hurdles to investment, including the expected returns from such long-term investment, as well as the inherent risk of investing in such large-scale projects. The recent hugely over budget and part-cancelled delivery of High Speed 2 has left many investors hesitant of committing to large scale government infrastructure projects. The government will need to ensure continued dialogue with stakeholders/investors in order to ensure that private motivations are met whilst still delivering key public infrastructure priorities.

Why Should Aspiring Lawyers Be Interested?

Infrastructure offers varied and intellectually demanding work that spans across many different areas of law, including planning, environmental, property, public procurement, and contract law. Understanding how these areas of law within long-term government strategies builds a strong foundation for both solicitors and barristers entering the profession.

Lawyers working within planning, infrastructure and/or energy sectors are likely to see an increase in work from developer clients – including house builders and energy providers – who feel this now provides sufficient certainty to commit to projects. With net zero goals and climate resilience built into the strategy, there is also a growing demand for lawyers with expertise in environmental law and policy who may need to advise clients as to how their proposals can be adapted in order to meet policy targets and assist in shaping a sustainable future for the UK.

Equally, lawyers may be engaged to object to infrastructure schemes where it is felt that these do not meet government targets, including relating to climate change policy.

The Strategy also relies heavily on private finance and innovative funding models to deliver infrastructure. Lawyers working in finance teams will play a critical role in structuring deals, navigating regulatory compliance and drafting and negotiating contracts to finance these deals – whether this be acting for lenders, developers or public bodies. Understanding the government’s commitments and the risks/rewards involved in investing in long-term infrastructure is essential commercial awareness for any project finance lawyer.