UK to invest £650 billion in infrastructure
By World Infrastructure Journal-
As the UK looks to simultaneously ‘level up’ and set itself on the path to net zero, its recent commitment to investing in infrastructure and creating jobs is a step in the right direction. Delivering on those commitments is, however, easier said than done.
The announcement of the National Infrastructure and Construction Pipeline (NICP) plan, published on Monday the 13th, will look to pump more than £650 billion of public and private money into developing the nation’s infrastructure. This looks to support “ambitions to level up across the country, strengthen the Union, meet the UN Sustainable Development Goals and put the UK on the path to net zero emissions by 2050." The plan will focus on supporting transport, utilities, energy, and social infrastructure over the next four year – with a combined sum of some £200 billion. From 2024/25 onwards, however, investment will largely focus on energy with a promised investment of £150 billion, almost £120 billion more than the next most well-funded sector (transport) will receive.
That is not to say that other areas of infrastructure will be neglected. Within the allocation for social infrastructure there is a promise of some £2.5 billion for community education projects, which will include major redevelopment on schools. Additionally, there will be money put towards the retrofitting of existing buildings to bring them up to environmental standards – a hugely important move given that buildings currently account for roughly 22 per cent of the UK’s greenhouse gas emissions.
For the most part, these figures make sense. The inadequacy of the UK’s energy and transport infrastructure has not only been an impediment to the ‘greening’ of those sectors in particular, but rather has delayed the improvement and modernisation of others (such as housing and waste management). As such, the news that long-neglected areas of infrastructure are becoming priorities for policymakers is extremely encouraging – as well as the promise that the NICP plan will support the creation of 425,000 jobs a year over the next four years.
Unfortunately, there is ample reason to temper that excitement, as there is quite some distance between the promises being made by the UK government and their ability to deliver on those promises. In energy, for instance, there have been significant issues with the upkeep of infrastructure. In nuclear alone, the planned closures of Sizewell B in Suffolk, Hinkley Point B in Somerset, and Hunterston B in Scotland were pushed forward this year due to persistent structural issues. Should such closures continue to occur, their impact will not be limited to the energy sector – and should these persistent issues become severe enough it may threaten the deliverability of the whole project. The potential for failure is made even more concerning by the likelihood that a great deal of the money put forward will come from pensions.
Even more concerning than the UK’s history of failing to properly maintain and plan infrastructure, however, is the fact that £650 billion is very likely not going to be enough to close the infrastructure gap. Though there is no authoritative answer on the exact size of the monetary gap between the current status of infrastructure and where it needs to be if the UK is to prosper and grow, there are a number of estimates that place the price of ‘levelling up’ somewhat higher than £650 billion. According to one recent (and rather conservative) estimate from a 2020 report conducted by Legal & General, the UK infrastructure gap is roughly £1 trillion – and the London Councils website states that “London has an infrastructure funding gap of £1.3 trillion. ” The actual price, however, may be even higher.
After a decade of economic stagnation and almost forty years of austerity in government spending, the UK now finds itself attempting a revival of certain elements of the welfarist ideals that were popularised in the post-war period. It does so, however, at a critical juncture in scientific and social development. The world’s approach to energy, to transport, and to infrastructure as a whole is changing to respond to the growing need for environmental accountability and social infrastructure – and should the UK be smart and ambitious with its vision of infrastructure’s future it may quickly position itself as a global leader in the new era of green economies.
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