D Insights
Jul 8, 2024

What is Infrastructure for Opportunity and Does it Mean Game Over for Levelling Up?

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What is Infrastructure for Opportunity and Does it Mean Game Over for Levelling Up?

There is no doubt that there is a belief in Labour that investment in infrastructure can better work to address regional inequality. Delivering social value through infrastructure will be a priority, but making sure it is measured in a clear and replicable way will be important to ensure it isn’t subject to repeated challenge.

The geographical element of infrastructure:

We don’t have the same level of infrastructure across the nation. This holds our regions back. Not an anti-London argument but clearly it has benefit from things like land value uplift. This is the rationale behind ‘levelling up’ and infrastructure for opportunity. Labour has been happy to run with this framing until relatively recently, building their own narrative around ‘infrastructure for opportunity’.

What will the relationship be between what a National Government does and a mayoral combined authority does? To assist with this, Labour is introducing a regional industrial strategy council and a wealth fund. More of a streamlining of existing funding mechanisms that could operate as an ‘evergreen’ type investment fund.

A new, unified infrastructure delivery organisation:

The NIC and IPA could are also likely to be merged into NISTA, to be aligned very closely with industrial strategy council. The plan here is to bring together planning and the delivery side of infrastructure into one conversation. The new organisation will be responsible for delivering national housebuilding targets, and ensuring infrastructure uplift goes alongside these targets to make them workable.

Funding local infrastructure:

Labour has also not fully answered the funding question around local infrastructure  with it coming at the end of the process as they do with S106 and CILs, this can lead to delays and disputes. Fixing this is an integral part of Labour’s strategy, but it needs to say more about timescales and practical barriers to delivery on the ground – these are the key challenges facing nationally significant capital projects and Labour cannot succeed without addressing them + the infrastructure skills issue.

For industry, the question is how can we ramp up from where we are now, what do we need from Government in order to deliver? Industry would also do well to bear in mind how they engage with politics and politicians (as opposed to just Government) – how their work can support their objectives.

What will replace PFI?

PFI has worked reasonably well for industry, particularly after initial controversies.

PFI is a toxic concept in Labour circles, given the failures of its first iteration and are seen as exploitative, draining on public services that used them and unfair on workers who switched from public sector to private sector employment. What, then, is the future of public-private partnership? In effect, Labour must reengineer PFIs with the right nomenclature.

Labour might also consider the return on infrastructure investments in the long term HS2 was seen in a 30 year horizon, when 50 years would have made the case much less marginal. We can take inspirations from the Victorians, who built things to last.

How effective is Government in driving through delivery of infrastructure?

Delivering on the ground is challenging in the context of shifting policy, personnel and lack of coordination across departments. The levers of power are often faulty and do not have the effect newly formed governments think they will. Focusing on delivery on the ground will be important and Labour would do well to take stock of the current infrastructure workforce capacity.  

Part of the reason infrastructure is so costly in the UK is down to delays caused by reviews. Labour is likely to try to cut down on these with reforms oriented towards a streamlined planning and consent process.

What is the thinking behind Great British Energy?

Impetus behind GB Energy came from a previous context of spiralling energy bills (and profits), and would need a new purpose for a post electoral success Labour. It could also focus more on energy distribution alongside generation, as it was originally conceived around boosting onshore wind and nuclear.

Micro-generation could also play an important role in Labour’s sustainable energy strategy.

The views expressed in this podcast are those of the contributors and do not reflect the views of The D Group.  

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