TAPAS.network | 9 January 2025 | Editorial Opinion | Peter Stonham
FEW WILL DOUBT that the current Government has a very strong mission to enhance the nation’s infrastructure in the pursuit of greater economic growth, and the support to sectors it believes will be fundamental to the future shape of the economy. Not only is it structuring its spending plans and quest for private sector investment to this end, but is changing the planning system and other processes to make investment projects easier to deliver and less constrained by so called ‘red tape’, NIMBY objections and legal challenges.
In a key step to this end, a new body, the National Infrastructure and Service Transformation Authority (NISTA) will come into being in the Spring, combining the functions of the National Infrastructure Commission (NIC) and the Infrastructure and Projects Authority (IPA). The new organisation will aim to “bridge the gap between what we build and how we build it”, says the government. To do so, it has said it will have “a strong mandate” and “be subject to direct oversight from ministers at the centre of government.” It now emerges that NISTA will sit directly within the Treasury, which is currently recruiting for a Director General of the new Authority, whilst NIC’s Chief Executive steps down in March. Alongside a salary of £200,000, comes a £57,940 pension contribution for the new DG of NISTA.
Current NIC chair Sir John Armitt has meanwhile had his term extended to cover the transition period and “provide the stability and expertise needed to support the Government in developing its ten-year infrastructure strategy.” Armit will be on the NISTA DG appointment panel, with the Second Permanent Secretary to the Treasury, Permanent Secretary of the Cabinet Office and Chief Operating Officer of the Civil Service.
The Government says NISTA is intended to bring oversight of strategy and delivery under one roof, supporting the development and implementation of the ten-year infrastructure strategy in conjunction with industry, while driving more effective delivery of infrastructure across the country. It is being given a major responsibility - and a long list of challenges.
NISTA will advise on the improvement of quality, cost, schedule, performance and project outcomes in Government’s highest profile infrastructure and transformation programmes, to improve efficiency, assess and escalate risks and take corrective action to maximise success in major project execution. With the Major Projects Review Group it is expected to drive improvements in the delivery of major projects whilst actively identifying barriers to infrastructure delivery in both the public and private sectors, and make recommendations to the centre of government and Ministers on how to resolve them.
The new NISTA director will have a high profile job- working from the Treasury through Accounting Officers, and Ministers across Whitehall to manage the Government Major Projects Portfolio and ensure that there is the required capacity and capability in place to deliver. They will also be expected to represent NISTA and the government’s infrastructure strategy in the media
At the Budget, the government committed to spending 2.6% of GDP on public sector net investment on average over this parliament, increasing public investment by £100 billion over the next five years to boost growth and help crowd in private investment for its plans, with NISTA responsible for implementing the new 10 year infrastructure strategy, reforming the way infrastructure and other major projects are delivered,coordinating capability and leading the expertise on project delivery and project financing. The publication of the 10 year strategy is intended to provide greater certainty for investors and supply chains, removing barriers to investment and creating an environment that supports private investment,with the new NISTA chief representing the government across the UK and internationally. It is quite a role.
“Generations before us built the infrastructure the entire nation was proud of - from civic buildings to train stations, hospitals to schools. So, we will introduce a new golden era of building,” says Prime Minister Sir Keir Starmer. “That’s why we’re fast-tracking 150 planning decisions on major infrastructure by the end of parliament, more than double those decided in the previous parliament. We’ll build the schools, the hospitals, the railways and roads, the towns and villages, that will shape our national landscape for years to come and fuel growth in every region and nation,” as he put it when presenting his ‘Plan for Change’ speech on 5 December. Most of the projects will require expedited sign off of the related development consent orders (DCOs) to get them underway.
We are at a pivotal moment for our nation. We must invest in our future, and that starts with ensuring our infrastructure can meet the challenges of tomorrow.” - Sir Keir Starmer, Prime Minister
Starmer emphasised that his ambition is to eliminate bureaucratic delays and foster an environment that supports swift construction and innovation. “We are at a pivotal moment for our nation,” he stated. “We must invest in our future, and that starts with ensuring our infrastructure can meet the challenges of tomorrow.”
The government intends this will all be achieved through the recently published new National Planning Policy Framework and updates to all relevant National Policy Statements by next summer. It says it will also make improvements to planning at a local level, modernising planning committees and increasing local planning capacity. It promises that its Planning and Infrastructure Bill will “create a win-win for development and nature; and streamline processes for critical infrastructure”.As the centre of excellence in project delivery, NISTA will be the home of the project delivery function with responsibility for training programmes and capability building,and expertise throughout Government to tackle the wide-ranging capital project portfolio. It will be responsible for around 250 staff, located across multiple sites.. In its wide ranging purpose, NISTA will have its fingers in a many pies across a wide set of functions in Government, and almost every department.
During his speech, Starmer outlined a variety of sectors that would benefit from these DCOs, including renewable energy, transport and housing. He highlighted that these projects will not only improve the nation’s connectivity but also enhance energy security and support the UK’s transition to a greener economy. “We are committed to building a sustainable future,” he added,
Sign off on the schemes he wants to get built could end up being the easy part, however.
National Infrastructure Commission chair Sir John Armitt says delivering 150 would be a “huge undertaking”. That may be an understatement, as at the last count in March 2023, the government was working on 76 major infrastructure projects: from Sizewell C and HS2, to a polar research vessel, the refurbishment of the UK’s Washington embassy and the Holocaust Memorial Centre. Sir Keir’s commitment could mean tripling that.
The first challenge is cost. The existing portfolio of 76 has a combined lifetime cost of. £403bn. That’s over £5bn per project. We have no idea how much an extra 150 would cost, not least where public or private funding would be found.Total expenditure has been estimated at in excess of £800bn Thie NISTA role will also extend to private financing initiatives, ensuring the project pipeline is attractive to private investors and that the government receives high-quality advice on private finance and investment in major projects
The second challenge is capacity. Could the public and private sectors physically cope with triple the current programme? What productivity reforms would be needed? And are there the professional resources available to build all the schemes? Not least the construction workers vital to building the 1.5million new homes. The Construction Industry Training Board reckoned they’d anyway need an extra quarter of a million new staff even before the ambitious housing target was revealed.
The third challenge is time. Ongoing major infrastructure projects are expected to take, on average, 11.5 years to complete. With this parliament running until 2029, it could feasibly be the 2040s, rather than one parliamentary before the Government’s new commitment bears fruit.
And finally, will there be a smooth pathway to getting all these projects underway without objection, resistance,and obstruction?
Not to mention surviving the pressures of working within the Government’s spending limits- and the cost of borrowing the necessary money
The National Infrastructure and Service Transformation Authority thus faces a tough task in becoming the Government’s centre for expertise for infrastructure investment and major projects, sitting at the heart of government, reporting to HM Treasury and the Cabinet Office. It could become the focus for any performance failures with its chief as vulnerable to ejection as any under-performing football manager.
Its brief will extend to successful delivery of a huge range of infrastructure and major projects ranging from railways, schools, housing and energy to defence, IT and major service transformation programmes. This will include advice provided to Ministers (which will include The Transport Secretary) on major investment decisions through the Major Project Review Group process.
Indeed, the way the relationship of NISTA with planned transport investment plays out looks a very interesting prospect for the next few years.
NISTA seems sure to play a role in determining priorities for rail investment and infrastructure, and delivery of the Roads Programme. Its activities will inevitable overlap with DfT, GBR and National Highways.
A glossy brochure to interest potential candidates in the NISTA DG position features a majority of images relating to HS2 amongst the supporting visuals about the role of the new body. It is perhaps not a propitious example given the current highly charged controversies over the escalating bill for building the high-speed railway now put in excess of £80bn at current prices, with estimated costs up by 15% since the last parliamentary report just over a year ago. A full review is now being carried out by the new HS2 Ltd chief executive, Mark Wild, as we report in this issue. Wild, who officially started in early December previously helped Transport for London deliver Crossrail after its own much-increased budget and timescale, again illustrating the challenges of major project delivery - and the relentless public criticism that brings. Just look at the headlines related to revelations about the £100m cost of a “bat shed” being built beside the HS2 line, and the prospects of runaway costs effectively leading to the northern leg being axed by Starmer’s predecessor Rishi Sunak
Alongside rail investment and infrastructure, NISTA seems sure to play a role in determining priorities for and delivery of the Roads Programme, another area in which activities will overlap with DfT, and National Highways. Decisions are outstanding on a number of major schemes in the context of a need to rein in the DfT’s expenditure plans in the light of an overspend, for which an internal review panel was set up by previous Transport Secretary, Louise Haigh, chaired by Rachel Skinne. This seems now likely to be overshadowed, by the Treasury’s own review panel charged by the Chancellor, with going through spending line by line in each Department in the quest for value for money and alignment with the Prime Minister’s key missions. No doubt NISTA will soon be casting its own critical eye over the DfT’s plans and how they can be best delivered quickly and cost-effectively.
All of this Government-led attention to infrastructure investment, does of course, needs to sit within the legal framework for planning approval of major schemes, itself in the context of the guidance provided in the National Networks National Planning Statement, NNNPS, as revised last year and now due for further revision. A shadow over this has been cast by a legal challenge questioning the principles being used to relate individual projects to the Government’s overall obligation on decarbonisation.
Before Christmas the High Court granted permission for campaigners Transport Action Network to proceed to a full judicial review of the NNNPS, the government’s key guiding directive on major road building. The NNNPS was revised by the previous government, amid criticism it had weakened consideration of the Climate Change impacts of road schemes and ignored the potential for modal shift and other transport policy measures as alternatives to major new infrastructure.
The Department for Transport has sought to resist the court challenge and this month needs to file a full defence for a case to be heard in the Spring.
TAN’s contention is that the government cannot simply manage emissions in an “economy-wide way”, rather than relating them to specific programmes and projects, as the NNNPS reflects. It is likely to mean there will be detailed questions at the full hearing about the Government and Transport Department’s roads and climate policies, perhaps a forerunner of other challenges the government’s new infrastructure investment drive will more generally face.
“Unfortunately no one in Whitehall appears to have passed the news of our challenge on to the Prime Minister “ TAN noted. “About 30% of the Nationally Significant Infrastructure Projects (NSIP) schemes on the Planning Inspectorate PINS website are transport related, most of them roads,” it said. Assessment of NSIP schemes, governed by the NNNPS is likely to be a key interest of the new NISTA.
With the government already required by the courts to publish a revised Carbon Budget Delivery Plan by May, and due to complete the Spending Review in June, the combined pressures on spending and climate targets may impact National Highways’ plans for major road building in the third Road Investment Strategy (RIS3), whatever the Prime minister and NISTA hope to achieve.
Keir Starmer himself, and Chancellor Rachel Reeves, are now clearly taking charge of the drive to get road and other schemes underway as part of the major plan to get new infrastructure built.This has called into question the status of specific Departmental decision-making processes, like those of the DfT about which schemes should be pursued and which dropped,and on the processes of appraisal.
A further dimension to this developing agenda regarding national infrastructure investment is the matter of admissibility of legal challenges to Nationally Significant Infrastructure Projects, recently considered by a review, initiated by the last Government and published by the Ministry of Housing, Communities & Local Government at the end of October. Planning barrister Lord Charles Banner KC, assisted by Nick Grant, were appointed by then Prime Minister Rishi Sunak in February to undertake a review of legal challenges to development consent orders (DCOs) granted for NSIPs under the Planning Act 2008. The prompt for the review was a concern in government and amongst some stakeholders, including National Highways,”that unmeritorious legal challenges to DCOs were causing significant undue delay to the delivery of NSIPs, with consequent detriment to the public interest.”
Lord Banner concluded that the concern was “in significant respects well-founded”,in terms set out in his report. He makes ten recommendations with ways of streamlining the process for judicial review of DCOs “so as to minimise delays caused by unsuccessful legal challenges, whilst at the same time respecting constitutional principles”. His proposals are seen in legal circles and having highlighted some issues the new government may seek to take further in protecting the 150 major infrastructure schemes it wants to see built from challenge. The review looked at the history of challenges as well as engaging with stakeholders in the NSIP regime. The A303, A47, A57 and A428, A66, A38 were all amongst case studies. The Prime Minister will surely be watching this with much interest, given his concern with the ‘Blockers, NIMBYS and naysayers’ he attacked for holding back projects to achieve growth in his major Mission relaunch speech at Pinewood before Christmas.
Housing and Planning Minister Matthew Pennycook said the review came as the government sought “to break down barriers to building and deliver the investment and growth that the country needs.” This included the forthcoming Planning and Infrastructure Bill, “which will turbocharge housebuilding and accelerate the delivery of major infrastructure projects.”
His Department said the Government “will carefully review the report and its recommendations before publishing a response with a focus on ensuring there is a balance between the critical need for projects and maintaining the public’s right to challenge government decisions.”
Indeed Deputy Prime Minister Angela Rayner must be well aware of the potential for such challenges to derail her plan to deliver 1.5 million homes in this parliamentary term -something no housing minister has done since the 1950s. She has sent warnings to councils who might have concerns about the local implications, that she would sweep aside blockages to development - including, perhaps,the councils themselves under her proposed local government reorganisation. How she, and the government will deal with any newts, bats, and insects who often stand in the way of development, is however unclear.
All in all the omens aren’t that great for a smooth passage for either the housing target, or the government’s wider infrastructure ambitions.
The promise of structural change to get things done highlights the centralisation of command and control of investment at the heart of Government, and in particular the Treasury. The addition of NISTA to the Chancellor’s portfolio of levers to drive things forward indicates a definite switch to top-down management at a time when talk elsewhere within the Government is using the language of devolution and local empowerment. It also suggests a further diminishment of the authority of the Department for Transport, already in the shadow of the Ministry of Housing Communities and Local Government on strategic transport planning policy, and now in determining infrastructure priorities in its territory, and even a potentially tense new relationship between the DfT with new agency for railways, GBR, and that for roads, National Highways, as the Treasury takes an even firmer grip on funding and project approval and management.
How this will play out promises to be yet another potentially very difficult trajectory for the Government, already finding a good deal of trouble in handling the practical challenges of policy delivery.
As recently demonstrated in other areas, it does sound rather like nobody’s quite thought through the full complexity of this one. Either way, there’s a very big task out there for the new head of NISTA.
Peter Stonham is the Editorial Director of TAPAS Network
This article was first published in LTT magazine, LTT906, 9 January 2025.
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