Spending Review & National Infrastructure Strategy response

Peter Kydd, SWIP Chair, provides an initial response to the Chancellor’s Spending Review announcement and the publication of the UK’s first ever National Infrastructure Strategy:

From a South West perspective, there were several announcements on infrastructure that may benefit the region. Importantly, the Chancellor announced capital spending on infrastructure will total £100bn, a £27bn real-terms rise from last year. There will also be a new UK infrastructure bank, headquartered in the north of England, to finance infrastructure projects from next spring, in partnership with the private sector.   

Alongside the Chancellor’s statement, the Government also published the National Infrastructure Strategy, focusing on three core themes: 

  • Driving recovery and rebuilding the economy
  • Decarbonising the economy and adapting to climate change
  • Accelerating and improving delivery

We are pleased to see references to the West of England Combined Authority (WECA) and the Western Gateway within the levelling up sections of the strategy, and there are commitments to improving rural broadband, improved cycling and public transport investment and flood defences. The strategy includes a £4bn levelling up fund which is open to all regions although only time will tell how successfully the South West will access this fund given the political focus on the North of England. Crucially, successful applications need to be capable of being implemented quickly, supported by the local communities and their MPs.   

Transport funding for the South West includes £59m to Plymouth and £79m to the Bournemouth and Poole area. The strategy also mentions the A303 Stonehenge scheme, the MetroWest proposals in Bristol and confirms that, alongside other combined authorities, WECA will benefit from intra-city transport settlements from 2022/23. 

The strategy references the changes to the Green Book. These include ending the dominance of the Benefit Cost Ratio (BCR) in decision making and requiring instead a more comprehensive assessment of benefits, including non-economic impacts. The updated book will also require options to be assessed primarily on their ability to deliver relevant policy objectives and any option which fails to do so will not be considered value for money and be rejected. On the basis that delivering net zero is a key policy objective, this is welcome and aligns with our own consultation response.

The bulk of the strategy describes the work necessary to deliver a low carbon economy, much as set out in the Prime Minister’s Ten Point Plan. The final theme on delivery outlines the welcome creation of the National Infrastructure Bank which could see the Government acting as a cornerstone investor on key projects. Importantly, the Government has committed to provide investors with long term policy certainty and supporting new technologies and decarbonisation. 

Within the South West, we now have clarity of policy direction and visibility of how past barriers can now be overcome. Whilst the strategies and plans require more consideration, and lack detail in many places, nevertheless, the challenge for us is how we take best advantage of this to shape the South West’s future infrastructure.