New body to “get a grip” on infrastructure delays

The cycle of underinvestment and instability that has plagued the UK's infrastructure systems for over a decade is to come to an end, with the Chief Secretary to the Treasury, Darren Jones, outlining new plans to break this cycle and deliver a decade of national renewal to power growth across the country.

In a speech at Skanska's national HQ - one of the world's largest construction companies - the Chief Secretary to the Treasury Darren Jones today (Thursday 10^th October) set out his vision for the future of the country's infrastructure.

The Chief Secretary announced a new National Infrastructure and Service Transformation Authority (NISTA), which will look to fix the foundations of our infrastructure system by bringing infrastructure strategy and delivery together addressing the systemic delivery challenges that have stunted growth for decades.

The Chief Secretary warned that investor confidence has been shaken by a cycle of underinvestment and instability that has plagued the UK's infrastructure's systems, with statistics showing that the UK has historically ranked lowest among the G7 for investment, alongside the lowest public capital stock in the G7, 15% below its average.

The Chief Secretary also said infrastructure is the very lifeblood of the country's economy, and that through it, working people are better connected with the opportunities they need, businesses can find the top talent they need, and Britain is better linked to the rest of the world.

Darren Jones, Chief Secretary to the Treasury said:

“This new body will get a grip on the delays to infrastructure delivery that have plagued our global reputation with investors. It will restore the confidence of businesses to invest and help break the cycle of low growth.”

NISTA will bring a much-needed 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.

He also stressed the urgent need to speed up the delivery of major infrastructure with a powerful national strategy, noting that this will help provide the stability required to help ensure private sector confidence and achieve better sustained economic growth.

The Chief Secretary confirmed the Government's objectives, priorities, and vision of the nation's infrastructure over the next decade through a ten-year infrastructure strategy, for the first time since coming into power. The speech comes just days ahead of the International Investment Summit on 14 October which will bring the world's biggest businesses and investors to the UK to hear about the country's economic strengths and investment potential.

The National Infrastructure Commission will also today publish an independent report into the systemic issues in the UK that have historically increased the cost of delivering major infrastructures. The report will point to a debilitating lack of strategic clarity as a root cause, that has increased the delay of decisions for national infrastructure by up to 65% since 2012.

Also confirmed today is the extension of Sir John Armitt's role as Chair of the National Infrastructure Commission to continue to provide the stability and expertise needed to support the Government in developing the ten-year infrastructure strategy.

Speech

Good morning and thank you all for coming.

Growth

Today I'm setting out the Government's vision for our country's infrastructure, building on the Chancellor's three pillars of stability, investment and reform. Taken together, we believe this approach to fixing the foundations will improve productivity in the public and private sector, and help deliver on our mission for growth.

We all know why growth is this year's first mission. If the UK's economic growth had matched the OECD average over the past 14 years, our economy would be more than £140 billion larger.

We could have generated £58 billion of extra revenue to invest in public services, and in unlocking opportunities across our country.

This failure to stimulate growth is the root cause of the £22 billion black hole we discovered in our public spending, and working people understand this all too well already – because they are living with the impact of those wasted years.

That's why this government, the Chancellor and I have made growth our defining mission, and why as a government of service, we will strive to protect working people from the failures of the past.

Infrastructure and growth

Infrastructure is a key engine for growth. But at the risk of understatement, at present that engine seriously needs an MOT.

Without well maintained trains and roads, businesses will struggle to export, expand, and employ.

Without investing in renewable energy, firms and families will be exposed to the volatility and insecurity of foreign gas and oil prices, often driven by overseas conflicts.

And without a clear infrastructure strategy, investors can't take the long- term investment decisions that this country needs.

That's why I welcome today's report from the NIC, which sets out the drivers behind escalating costs of major projects. They point to a lack of strategic clarity as one of the root causes. It lays bare in the starkest terms the consequences of the past 14 years.

Instead of clarity we've had confusion.

Instead of strategy we've had short-termism. And instead of stability, we have had chaos.

All of which has reduced investment in our infrastructure.

Because behind the complexity of the numbers, the graphs and the data, there is a simple truth.

What investors need most of all from government is trust. To trust in our plans, and trust that we will deliver them.

Sadly, that trust has been broken. So, I am here to rebuild it…

… so that you can help us to rebuild our infrastructure…

… and together, rebuild Britain.

Fix the foundations and new approach

To do that, we have to start by fixing the foundations. We can't build infrastructure, or our economy, on foundations which have been progressively fractured over the past 14 years.

Because just like good transport infrastructure provide a stable path for firms to grow, or a reliably priced energy supply allows families to budget and plan for the future…

… it's only through fixing the foundations that we can achieve the economic stability on which we will rebuild Britain.

That will require tough decisions, in order to get a grip of public spending. And, above all, it will require a change of approach.

This change in approach will be the right kind of change: long-term, joined-up and strategic.

Not the directionless chaos of the past 14 years, but the lasting change of a decade of national renewal.

To sum it up, three words: “strategy and delivery”.

Stability

I'll begin with the strategy, which delivers on the Chancellors demand for stability.

We will publish a 10-year infrastructure strategy next spring, alongside the 2025 multi-year Spending Review.

This will outline our approach to our core economic infrastructure – like transport, energy and housing – and, for the first time, social infrastructure – such as schools and hospitals – which supports a flourishing and modern economy.

This strategy will be coordinated across Whitehall and will align with our improved spending framework, making sure that we will allocate capital better in the future.

Investment

A new and improved relationship with the private sector will be crucial here. There is, after all, only so much that the public sector can or should do, and we all know that the vast majority of our growth will be driven by the private sector.

So we will unlock private investment by being a real partner to business, sharing in the risks and financial burdens that come with investing. The National Wealth Fund will provide billions of pounds of public money to be invested alongside private funds, drawing greater investment into the industries which will power our growth for years to come.

And we will bring together the deep pension pots that exist throughout the UK – but which often don't provide a particularly good return – and our most promising high-growth businesses, to the benefit of defined contribution pension scheme users and entrepreneurs alike.

By our estimates, pension pots could be boosted by £11,000, while unlocking £8 billion of new productive investment into our economy.

And of course, as so many wise voices have called for, we have committed to taking on the role of a strategic and active state, through a new, modern industrial strategy.

It will provide much-needed clarity and certainty over the government's approach to key British sectors and industries, and long-term guidance on our priorities, helping investors to plan ahead.

And it will help ensure our Growth Mission is resilient to global challenges, supports regional growth, and delivers an acceleration to net zero.

Delivery

Because strategy without delivery is meaningless. The last government made a plethora of empty promises that they never delivered, such as a high speed rail line to Manchester.

And this failure to deliver has further undermined the trust in government that is necessary for investors to invest.

We have already taken steps to change that. Here are just three of them.

The Planning and Infrastructure Bill, which we will introduce this session, will accelerate the delivery of high-quality infrastructure.

It will streamline and simplify the consenting process for major infrastructure projects and enable relevant, new and improved National

Policy Statement to come forward, giving increased certainty to developers and communities.

We are working at pace with the energy industry and regulators to connect renewable energy projects to the grid, and the Secretary of State for Energy Security and Net Zero has already approved several major solar projects, consenting more capacity in the last three months than was installed in the last year, and creating thousands of jobs.

And the Deputy Prime Minister herself can intervene in the planning system where the potential for growth demands it. Initial examples include recovered applications for two data centres in Buckinghamshire and Herefordshire and a film studio near Marlow.

I hope that's all welcome news. But I want to provide even more

assurance to those looking to invest in Britain's infrastructure.

Because you must be thinking that you've heard it all before. Some nice words, from a politician in a hard hat and high viz vest, saying “this time, it's different”.

And then six weeks, six months, six years later… nothing's changed. You need to know that you can trust me.

And here's why you should.

Reform

When the Chancellor addressed the state of our public spending inheritance earlier this year, she stressed the importance of our expert institutions, such as the OBR, in ensuring fiscal stability.

I fully agree with her.

That's why I am confirming today, in line with our reform pillar, that we are strengthening oversight of the delivery of the government's infrastructure plans through the introduction of the National Infrastructure and Service Transformation Authority, or NISTA, which will be operational by spring 2025.

We will do this by combining the functions of the NIC and IPA, ensuring NISTA has a strong mandate, and bringing in external expertise and direct Ministers oversight.

The NIC has produced some excellent strategic reports of what infrastructure the country needed and the IPA's expertise and commitment to delivering critical infrastructure projects is unmatched, but the government failed to deliver.

Building on their work, NISTA will bring oversight of strategy and delivery into one organisation: developing and implementing our ten-year infrastructure strategy, in conjunction with industry, while driving more effective delivery of infrastructure across the country.

In short, it will bridge the gap between what we build, and how we build it. It will be a crucial part of our plan to improve delivery.

I'm also delighted to announce that Sir John Armitt has agreed to extend his term as the Chair of the NIC during this transition period. He will help

inform the infrastructure strategy, building on the analysis and recommendations the Commission presented in its second National Infrastructure Assessment, and working with the IPA as we create NISTA.

Conclusion

I recognise that as ever, there will be a lot of questions about what this means for our industry, investors, and infrastructure. I look forward to answering them, and I look forward to working with you all on this work over the coming months.

But if there's one message, I want you all to take away from today, it's

this:

A few months ago, the Chancellor announced that we will unlock investment and deliver growth through economic and political stability.

And growth will only come by fixing the foundations. There is much work to be done to build a new Britain. And today, our infrastructure plans begin it.

Thank you very much.