5.8 The basic building block of an efficient market for infrastructure finance is policy and regulatory stability, credibility and certainty. In this respect, the UK has one of the most stable policy and regulatory frameworks for infrastructure investment in the world. It has a track record of strong and credible independent regulation and vigorous protection of private property rights. The Government's commitment to preserving the good performance of its regulatory framework has most recently been underlined in the Principles of Economic Regulation published in April 2011.1
5.9 The Government is committed to improving the transparency and certainty of the policy and regulatory framework. It is therefore acting on two major fronts:
• through this plan, the Government is setting out, for the first time, a clear strategic vision of the UK's infrastructure needs and priorities over the long term and providing a stable policy context for infrastructure decisons. This plan also includes for the first time a forward pipeline of infrastructure projects that offers investors and suppliers better visibility of demand; and
• the Government is taking action to improve the coordination of decision-making between Government departments and independent regulators across the sectors. The Government will:
• aim to introduce legislation during 2012 on a Strategic Policy Statement for the energy regulator, with a view to publishing this by 2013;
• publish a Water White Paper by December 2011, setting out long term policy priorities to guide Ofwat and ensuring that the water sector continues to benefit from a stable, transparent regulatory regime;
• introduce a new economic regulatory regime for airports by the end of 2013, which is fully consistent with the Principles for Economic Regulation. This will put passengers' interests at the heart of the regulatory framework, remove unnecessary central Government involvement in key regulatory decisions and encourage investment in airport facilities that is in the best interests of consumers;
• continue to work with the Office of Rail Regulation and Network Rail to improve the process of setting budgets and outputs for Network Rail, including the Government's High Level Output Specification and Statement of Funds Available; and
• consider the recommendations from Alan Cook's independent review of the management of the strategic road network, which was published on 24th November. While this does not recommend creation of an independent regulator it does recommend that Government take a more strategic role in the management of the network, providing longer-term funding certainty for the organisation and acting as a champion for the interests of road users and the economy, through a performance specification with tough new targets for efficiency and customer service. Alongside this, the report also recommends reforming the status of the current Highways Agency, giving it a more independent Board, which can make better and more flexible commercial decisions with greater financial autonomy. The Government response is expected in early 2012.
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