1.86 High quality infrastructure is essential if the UK is to remain competitive. After many years of under investment, the UK is perceived poorly in international comparisons of infrastructure quality and in one recent survey was ranked only 28th in the world.6
1.87 To make the UK's infrastructure ft for the 21st century, the Government has published its National Infrastructure Plan 2011 alongside the Autumn Statement.7 The plan brings together the first ever comprehensive cross-sectoral analysis of the UK's infrastructure networks and sets out a pipeline of over 500 infrastructure projects. It commits to clear ambitions to address the key challenges in each major infrastructure sector - energy, transport, telecommunications, water and waste.
1.88 In order to mobilise the finance required to deliver the National Infrastructure Plan, the Autumn Statement announces a new strategy for coordinating public and private investment in UK infrastructure. The Government will use all the tools at its disposal to facilitate the private investment that will finance the majority of the UK's infrastructure. The Government will:
• bring new investors into UK infrastructure. The Government has signed a Memorandum of Understanding with two groups of UK pension funds (including the National Association of Pension Funds, Pension Protection Fund, and a separate group representing pension plans and infrastructure fund managers) to support additional investment in UK infrastructure. The Government is also working with the Association of British Insurers to set up an Insurers' Infrastructure Investment Forum. The Government will target up to £20 billion of investment from these initiatives;
• explore new sources of revenue to support investment. The Government commits to increasing capacity and improving performance on the A14, which will support proposed housing developments in Northstowe, Waterbeach and Alconbury. The Government will explore innovative ways of financing this work, including tolls, which will also be investigated for other new capacity proposals. By spring 2012, the Government will have developed proposals with local partners for improvements to the A14 road and the other local transport networks;
• allow local authorities more flexibility to support major infrastructure. The Autumn Statement announces the Government's support for the extension of the Northern Line to Battersea. The Government will consider creating a new Enterprise Zone at Battersea and allowing local borrowing against the Community Infrastructure Levy (CIL) to support this, subject to a commitment by April 2013 from a developer to contribute and develop the site. As part of its commitment to enable Tax Increment Financing, the Government will also consider allowing city mayors to borrow against future CIL receipts where this can make a significant contribution to national infrastructure; and
• use guarantees when investors cannot accommodate certain risks. The Government will, subject to affordability, consider using transparent forms of guarantee to support specific projects where this provides best value for money for taxpayers and users, recognisings that the private sector cannot always bear every risk in major new projects. In line with this, the Government recently confirmed its openness in principle to provide contingent financial support for exceptional risks in the construction of the Thames Tideway tunnel.
1.89 The Government is also increasing public investment in infrastructure, and has already announced the £500 million Growing Places local infrastructure fund and £150 million to expand mobile network coverage. As part of the new investment at the Autumn Statement, the Government can also announce major investments in road, rail, and broadband networks.
1.90 The Government will invest over £1 billion (of which around £900 million will be in the Spending Review 2010 period) to tackle areas of congestion and improve the national road network, including:
• £270 million for two new managed motorway schemes to allow use of the hard shoulder at congested times on the M3 and M6;
• £150 million for improvements to the M1/M6 intersection, £110 million for the A14 Kettering Bypass, £160 million for widening the A453 and £110 million for the A45/46 Tollbar End improvement scheme; and
• £220 million for smaller projects which will deliver significant improvements on the road network, such as removing bottlenecks and improving safety and road layout.
1.91 More than £1.4 billion will be invested in railway infrastructure and commuter links, including:
• supporting Network Rail to deliver £290 million to electrify the Transpennine railway route from Manchester to Leeds, and £270 million for a rail link between Oxford and Bedford;
• supporting Network Rail to deliver £390 million of enhancement and renewal works to improve stations and rail infrastructure, improve resilience against extreme weather and tackle problems more quickly;8 and
• the Government funding improvements to the quality of travel for rail users, including £45 million to extend smart ticketing across London and the South-East, £80 million to support the Southern Rail franchise's procurement of 130 new carriages, and £290 million to limit the increase to regulated rail and Transport for London fares in January 2012 to the Retail Prices Index (RPI) plus one per cent.
1.92 The Government will commit £170 million of extra funding to allow more local transport projects to go ahead, including the Kingskerswell Bypass in Devon, the Lincoln Eastern Bypass and Manchester Cross City Bus, and will write down £150 million of debt on the Humber Bridge, which will halve the tolls for cars.
1.93 The Government will invest £100 million to create up to ten 'super-connected cities' across the UK, with 80-100 megabits per second broadband and city-wide high-speed mobile connectivity. There will be a particular focus on small and medium-sized enterprises (SMEs) and strategic employment zones to support economic growth. Edinburgh, Belfast, Cardiff and London will all receive support from this fund, and a UK-wide competition will decide up to six further cities that will also receive funding.
1.94 Where appropriate the devolved administrations will receive Barnett consequestials to invest in their key infrastructure priorities. In addition, £50 million will be made available to replace the Caledonian Sleeper feet, to improve on-train facilities. The funding is subject to the Scottish Government agreeing to co-fund the replacement and provide the remainder of the funding. The Government has announced around an additional £100 million for the Scottish Government to enable it to draw down its fossil fuel levy surplus and increase investment on renewable energy in Scotland. The Government will also engage with the Welsh Government on improvements to the M4 in south east Wales.
1.95 The National Infrastructure Plan also commits the Government to support the delivery of key infrastructure projects. The Prime Minister has asked the Chief Secretary to the Treasury to chair a new cabinet committee on infrastructure. This committee will monitor the delivery of the 40 infrastructure projects and programmes most critical to growth. It will ensure the Government shows decisive leadership in tackling planning and regulatory delays and addressing key commercial and policy issues.
1.96 The Government's focus on delivery has:
• enabled eight major projects around the country to proceed since summer 2011, including the A1 at Elkesley and seven electricity generation projects that are collectively worth an estimated £4 billion but which were held up by delays in receiving planning approval;
• led to a commitment, announced in the Autumn Statement, to build a new crossing across the Lower Thames, with the Government launching analysis of three options to inform a consultation in 2013. The Government will also explore the options for tackling pressures at Junction 30 of the M25 and on the A13 corridor as part of that analysis; and
• supported the development of the London Gateway port, which is forecast to create 12,000 jobs, by helping the developer identify sufficient traffic management measures that, once formalised, will enable the next phase to proceed within a variation to the existing planning consent.9
1.97 Figure 1.1 sets out infrastructure projects that will be taken forward across the UK. Further detail on these measures and on progress across all the priority projects and programmes is set out in the National Infrastructure Plan.
[Access-Figure 1.1: Government Actions To Support New And Existing Infrastructure Investment-PDF]
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6 World Economic Forum Global Competitiveness Index, 2011.
7 Available on the HM Treasury website at www.hm-treasury.gov.uk
8 Costs are the total capital values of schemes that the Government will support Network Rail to deliver. The Government's contributions to payments on the Network Rail Regulated Asset Base over the 2010 Spending Review period are set out in Table 2.3.
9 Developer's estimates at www.londongateway.com/about-us/key-statistics.