The Treasury has expanded the NIC’s remit to include supporting climate resilience and the transition to net-zero, but there are some missed opportunities.
Amid the raft of announcements linked to the Autumn Budget and Spending Review, the Treasury published a revised remit for the National Infrastructure Commission’s (NIC) future work, including the next National Infrastructure Assessment due in 2023.
The new guidance adds a fourth objective to the NIC’s scope of work - to support climate resilience and the UK’s transition to net zero carbon emissions by 2050 - as recommended by ICE earlier this year.
This sits alongside the NIC’s existing objectives of supporting sustainable economic growth across the UK, improving competitiveness and improving quality of life.
A new climate change objective
In our submission to the Spending Review and Autumn Budget, we recommended that Treasury update the objectives for the NIC to include both net-zero and the UN Sustainable Development Goals (SDGs).
The NIC’s objectives drive how it undertakes its assessments and reflect long-term goals that Parliament has committed to.
The addition of a net-zero objective is therefore welcome, particularly as it explicitly covers climate resilience as well as mitigation.
Infrastructure will have a vital role to play in delivering net zero, so putting it at the core of the NIC’s work is an important step in closing the gap between the government’s ambitious climate policies and realistic actions to achieve them.
…but no mention of the SDGs
With the NIC having already signed up to the Vision for the Built Environment, which sets achieving the SDGs as the primary outcome for infrastructure development, we also recommended incorporating the SDGs in its objectives alongside net-zero.
This would make clear the links between infrastructure investment, the SDGs and the long-term societal outcomes sought by the government, and ensure greater weight is given to achieving those outcomes.
Strengthening biodiversity protection
In addition to the net-zero objective, the framework now also requires the NIC to consider potential interactions between its recommendations and the government’s legal target to halt biodiversity loss by 2030 and implementing biodiversity net gain.
The NIC was already required to consider housing supply alongside its economic infrastructure recommendations.
The change follows a recent paper in which the NIC argued more consideration should be given to the impact of infrastructure development on natural capital assets and that infrastructure projects should target environmental net gain.
There are a range of benefits arising from environmental net gain, including mitigating against climate change and flood risk, improving air and water quality, and improving quality of life.
The amended framework is therefore a positive move to provide clarity and transparency about the NIC’s future work.
Updating the NIC’s fiscal remit
The new framework also updates the NIC’s fiscal remit, requiring it to demonstrate that its recommendations are consistent with gross public investment in economic infrastructure of between 1.1% and 1.3% of GDP in each year between 2025 and 2055.
The fiscal remit is an attempt by the government to strike a balance between sustained investment to match the long-term infrastructure objectives and its commitment to fiscal sustainability.
The remit was previously set at 1.0 to 1.2% of GDP per year to 2050, so the change is a welcome indication of the government’s commitment to delivering the vision set out in the National Infrastructure Strategy.
In our recent paper on evolving the UK’s strategic infrastructure planning system, we noted the benefits of the fiscal remit for helping policymakers and the NIC focus minds.
However, we also recommended introducing illustrative budget bands to future NIC recommendations, with the fiscal remit forming the central band. The absence of this from the recent review means there has been a missed opportunity to enable a more meaningful public debate on the value of infrastructure and allow an adaptive investment approach by current and future governments.
The economic remit, which requires the NIC to set out how its recommendations would impact costs for businesses, consumers, public bodies and other end-users, remains unchanged.
Why does the framework matter?
As an independent and impartial advisor on infrastructure to government, Parliament, other elected officials, infrastructure professionals and the public, the NIC has a critical role in ensuring effective strategic infrastructure planning in the UK.
This is the first time since its inception in 2015 that the NIC’s remit has been updated. The addition of a net-zero objective is a welcome reflection of the crucial role infrastructure will need to play in achieving emissions targets, as well as climate change mitigation and adaptation, particularly as work continues on the vital second National Infrastructure Assessment.