Budget brings 2019 National Infrastructure Strategy and new NIC resilience study

Alongside his Budget statement last Monday, chancellor Philip Hammond issued the government’s interim response to the National Infrastructure Assessment (NIA) published by the National Infrastructure Commission (NIC) earlier this year; announced plans for a National Infrastructure Strategy in 2019; and confirmed the NIC will be conducting a new study to be published in Spring 2020 on the future resilience of the UK’s infrastructure network.

The interim response essentially set out the government’s track record of investment, and highlighted new steps taken in the Budget in response to NIC priorities.

On drought, the Treasury pointed to the government’s existing twin track approach to increasing supply and reducing demand, as well as to upcoming work including:

  • Laying the statutory water conservation report in Parliament later this year to propose future actions to challenge and support the industry to reduce water demand.

  • Consulting on a National Policy Statement for water resources infrastructure.

  • Working with the industry to further improve regional planning supported by a national framework.

The Treasury also noted that the water industry is beginning to rise to the NIC’s challenge. “Many water companies are planning to meet or exceed a higher level of resilience to drought than in previous rounds of water resources planning. This is an important step on the path set out by the NIC. Regulators are currently assessing water companies’ draft business plans to review whether they are in line with government expectations.”

On flooding, Treasury said it is already investing £2.6bn over six years to better protect the country from flooding and that, together with more than £1bn to be spent on maintaining flood defence infrastructure, this is projected to reduce overall flood risk to the economy by 5%.

In 2019, it plans to publish a policy statement setting out the government’s flood and coastal erosion risk management policy and the Environment Agency will also be updating its national flood and coastal erosion risk management strategy for England.

At the Budget, the government announced an additional £13m of investment to help communities at risk of floods across England access the information they need to protect homes and lives. The funding will result in an expansion of the flood warning service to an additional 62,000 properties, enabling coverage of 100% of those at high-risk; regional pathfinder pilots to drive the take-up of property level resilience; and improvements to mapping, forecasting and management of surface water flood risk.

In spring, the NIC recommended that government should ensure that plans are in place to deliver additional supply and demand reduction of at least 4,000 Ml/day. It said action to deliver this twin-track approach should start immediately and include plans for new water supply infrastructure, halving leakage by 2015 and enabling companies to implement compulsory metering by the 2030s.

It followed this up in its main NIA in July with recommendations on flooding. It said government should put in place a rolling six-year funding programme for a strategy to deliver a nationwide standard of resilience to flooding with an annual likelihood of 0.5% by 2050 where this is feasible. A higher standard of 0.1% should be provided for densely populated areas where the costs per household are lower.

The government will respond formally to the NIA in 2019, with a comprehensive National Infrastructure Strategy. This strategy will set out priorities for economic infrastructure and respond in depth to the NIC’s recommendations.

In the meantime, the government has commissioned the NIC to undertake a new study on the resilience of economic infrastructure systems. This is in addition to its recent commission for the NIC to carry out a study on economic regulation.

The resilience study will consider what action government should take to ensure that infrastructure can cope with future changes, disruptions, shocks and accidents. Specifically, it will:

  • Review UK and international knowledge and approaches.

  • Develop an understanding of public expectations and response to the potential loss of infrastructure services.

  • Analyse the resilience of economic infrastructure systems and the costs and benefits of improvements.

  • Undertake ’stress tests’ of sectors, areas and organisations.

NIC chair Sir John Armitt welcomed the Budget measures to improve key parts of the UK’s infrastructure – but warned that the “real test” will be the government’s proposed National Infrastructure Strategy, setting out an ambitious long-term and cross-sectoral agenda, addressing the UK’s needs in energy and water as well as transport and digital communications. Sir John said: “Now that the Budget has been announced, I would urge Philip Hammond to use his Spending Review and the planned Strategy to implement our recommendations in full.”