Infrastructure Spending includes energy, transport, water and waste projects. Development consent orders are required for designated projects rather than other consents such as planning permission, listed building consent and compulsory purchase orders.
In his first budget, Chancellor Rishi Sunak unveiled a series of exciting spending promises, designed to increase infrastructure spending to a level not seen for decades.
Overall, the Chancellor’s plans involve investing a massive £640bn for capital spending on infrastructure by 2025 – a generational change in the level of spending on public infrastructure.
Under Theresa May, previous Chancellor Philip Hammond had planned to spend £600bn on public and private infrastructure over a 10-year period, so the latest plans not only involve spending more money overall, but also spending it more quickly than the previous Government had planned to.
While much of the important detail has yet to be confirmed, and the publication of the long-awaited national infrastructure strategy has been delayed, the Chancellor’s spending announcements are likely to be well received by business, especially those in the community of infrastructure developers and investors.
After Prime Minister Boris Johnson’s announcement last month that the controversial HS2 high-speed rail link will go ahead, the Budget is a further positive sign that this Government is prepared to make use of historically low interest rates to end the tendency of previous Governments to talk a lot about infrastructure investment, but to deliver very little.
The current Chancellor seems to be of the view that the very low interest rates that we have seen since the financial crisis will continue for some time, so has rejected assertions that his aggressive borrowing plans are irresponsible.
His argument is that while overall Government borrowing may be higher than it has been in previous times, the cost of servicing the Government debt is actually lower.
Looking at these plans from a broader policy perspective, it is undoubtedly the case that infrastructure spending by Government serves many policy objectives, but for this Government right now, it can also be seen as supporting the investment case in global Britain and showing that Britain is thriving post-Brexit.
The timing of this is obvious, but with pressure on infrastructure in the South East and a shortage of new mega projects that are already in development, it seems that the Government is keen to show the strength of United Kingdom engineering and innovation to the world, as well as to bulking up the engineering sector for activation by inward investors.
A question that has been raised by a number of industry-insiders is how the Government actually plans to deliver and fund the huge expansion in infrastructure spending that it has announced. The Chancellor made no mention of the potential use of private infrastructure finance models, so there is a concern among many that private sector investors may have a limited role in delivering the pipeline of new work.
Further concerns have been raised about the lack of specific measures designed to deliver on the Governments commitments to reduce carbon emissions and to reach net zero greenhouse gas emissions by 2050.
The United Kingdom was the first major economy to legislate for net zero greenhouse gas emissions by this date and has since launched a Net Zero Review to help determine how the United Kingdom can maximise economic growth opportunities as it transforms into a green economy.
Perhaps understandably at this stage, there was almost nothing in the Budget to indicate how real that commitment is and how the Government intends to achieve it.
We’re looking forward to learning more about precisely how the Chancellor’s spending promises will be delivered, and what other projects the Government plans to prioritise, when the national infrastructure strategy is published later in the spring.