National Infrastructure and Construction Pipeline: the pros and cons of forecasting future investment

Peter Kydd looks at the implications for the South West of the updated National Infrastructure and Construction Pipeline and how it could be useful for the SWIP community. But there’s a warning on the lack of strategic direction and a question mark over its limitations in setting out a comprehensive forecast of infrastructure investment.

In February 2024, the Government published its latest version of the National Infrastructure and Construction Pipeline.  Produced annually for the last ten years, the original intention of these policy papers was to provide a forward-looking view of infrastructure projects over a decade to enable the supply chain to be more prepared to respond as and when projects moved through their various development stages.

The caveats that accompanied this initiative when it launched in 2013 are somewhat telling:

• The pipeline is not a statement of need or a commitment to undertake any of the projects shown.
• It provides a strategic and more credible overview of the level of public and private infrastructure investment planned over the rest of this decade and beyond (though in sectors such as energy, ports and waste, the decision to go ahead with individual projects will be determined by the market).
• The pipeline is based on unaudited administrative data and should not be considered as national statistics or as official statistics.
• Anyone using the pipeline data does so at their own risk and no responsibility is accepted by HM Government for any loss or liability which may arise from such use directly or indirectly.

The pipeline initiative was suggested by the construction sector as a “better than nothing” initiative but it would be interesting to evaluate its usefulness ten years on, particularly with many public sector projects featured in previous updates now having been cancelled, most noticeably the northern legs of HS2.

The pipeline was supposed to be accompanied by the latest National Infrastructure Delivery Plan, but this was last published in 2016 and covers the period from 2016 to 2021.

The current pipeline supersedes the last version which was published in September 2021. It is a much simpler document than previous versions and the cancellation of HS2 removes much of the rail programme in the latest version. The pipeline is split into investment (662 lines of project information) and procurement (536 lines of project data) and is categorised by sector.

The Independent Projects Authority (IPA), who produce the pipeline, estimates the total 10-year pipeline at £700-775 billion. This is less per annum than the 2023 to 2025 figures. The majority of planned expenditure is on energy, including transmission projects, accounting for over half of the proposed projects (51%) followed by transport (30%).  However, the IPA believes there will be growth in areas including water and sewerage, broadband/communications, and continued commitment to investment in a range of transport and key social infrastructure (such as hospitals and schools).

It is also necessary to look at the further caveats contained in the latest pipeline and associated reports:

• Projects which are the responsibility of devolved administrations are excluded, hence most of the projects are located in England.
• Only projects with values greater than £25m (economic infrastructure) and £15m (social infrastructure) are included.

In summary, the pipeline can only represent an approximation of future investment and expenditure on infrastructure. It suffers from a lack of strategic direction, relying instead on private sector interest and projects that make it through the Comprehensive Spending Review.  There are many omissions (for example, broadband where investment requirements are considered commercially sensitive, and projects administered by devolved governments in Scotland, Wales, and Northern Ireland). There is also the risk that many projects that are included are subsequently cancelled for political reasons or by the private sector where rising costs impact the investment case.

While some of the analyses are helpful, for example, assessment of the size of the energy and transport sectors and identifying areas of future growth (water and broadband), the lack of a current strategic infrastructure plan is a concern.

Looking at it from a South West perspective, the analysis of planned investment per head is relatively high for the South West (£2,510 compared with London at £2,040) but an analysis of the area served rather than the population would produce a very different result. The 35 projects listed in the South West are dominated by the A303 improvements including the Stonehenge tunnel, the Network Rail renewals programme, and Hinkley Point C. 

For SWIP and its community of contributors, the Government’s National Infrastructure and Construction Pipeline 2023 is worth a look as it gives an insight into possible future projects. 

• It sets out planned and projected investment in major economic and social infrastructure over the next 10 years, the workforce requirement to deliver it, as well as a list of near term planned procurements. 
• It could be very helpful in identifying synergies across sectors.
• It also provides a multi-sector insight to help industry to make informed business planning decisions, and support investment in skills and construction productivity.

However, it is important to remember it can only be used as a guide – it will provide an insight into how the construction sector could look over the next ten years but it is not comprehensive. Plans change and it is likely to contain many projects which may never go ahead. It may also exclude future projects that have not yet been defined.