Turning ambition into action

Sir John Armitt CBE

Sir John Armitt CBE is Chair of the National Infrastructure Commission, National Express Group, and City & Guilds Group. He is also on the Board of the Berkeley Group and Expo 2020. In September 2013, Sir John published an independent review on long-term infrastructure planning in the UK. The recommendations in the Armitt Review received widespread support and resulted in the creation of the National Infrastructure Commission in 2015. In 1997 he became Chief Executive of Costain, going on to become Chief Executive of Network Rail. From 2007 he served as Chair of the Olympic Delivery Authority for the 2012 Olympic Games.

This year provides a real opportunity to make significant improvements to the UK’s critical infrastructure

There are currently three policy drivers behind the UK’s approach to major infrastructure projects: net zero, levelling up, and post-pandemic recovery.  Well designed and carefully planned infrastructure can help further each of these aims.

Yet for infrastructure to play its role fully, Government needs to set a clear strategic direction.  In doing so, it must engage with industry and regulators as appropriate, and back those policy aims with clear delivery plans which can be monitored effectively.  Science and technology are clearly core to the success of infrastructure projects, especially where these disciplines interface with civil engineering or the development of new energy solutions.  And when it comes to energy, 2021 holds promise as a year when we might hope to see genuine progress in turning ambition to action. 

Long-term needs

In 2018 the National Infrastructure Commission published the first National Infrastructure Assessment.  It analysed the UK’s long-term economic infrastructure needs, outlining a strategic vision over the next 30 years and making recommendations for how the identified needs should be met.  In its assessment and subsequent reports, the Commission made various proposals in relation to energy.

The UK should be set on the pathway to a highly renewable electricity system, to reduce greenhouse gas emissions and keep costs low.  The Commission recommended that the country should be running off 65% renewable generation by 2030 and has undertaken research to show this is readily feasible, based on current trajectories.  However, it is clear we will require ever-more sophisticated operating systems to ensure reliability and security of an electricity system increasingly based on renewables.

The decarbonisation of heating across residential and other properties must be addressed.  Changing how the country heats almost all of its buildings in less than 30 years is one of the biggest infrastructure challenges the country faces.  Currently, the costs of the two most promising technologies, heat pumps and hydrogen boilers, are high and installations will be disruptive for consumers.  We need a better evidence base for both these technologies before making strategic decisions by the end of this decade.  Regardless of the mix of technologies used for heating in the future, the energy efficiency of the building stock must be improved.  

We have therefore made the case that Government should set a target of installing 21,000 energy efficiency measures a year throughout the 2020s, focused on loft and wall insulation.  This could be achieved by allocating £3.8 billion for such measures in social housing, setting out new regulations for the private rented sector, and trialling innovative approaches for delivering energy efficiency in the owner-occupier market.

In addition, to better assess the viability of hydrogen, a community-scale trial of hydrogen heating should be delivered by the end of 2021 and a larger trial, of at least 10,000 homes, should be launched by 2023, with the hydrogen to supply these trials generated from gas-reforming with carbon capture and storage.  Also, by 2021 Government should establish an up-to-date evidence base on the performance of heat pumps within the UK building stock and the scope for future reductions in the cost of installation. 

Following our Assessment, we published a separate study looking at the role of economic regulators and how they can best support the transitions needed.  Among our recommendations, we proposed that Government should set out a long-term vision for each regulated sector through the publication of a strategic policy statement.

The challenges of reaching net zero in particular suggest both the need and opportunity for bipartisan and public/private collaboration on a whole new scale

Keeping up the pressure

Since 2018, the Commission has kept up pressure on Government to provide a comprehensive response to our Assessment, to offer both the public and private sectors clarity of strategic direction and therefore enable greater certainty in planning.

I am pleased to say that, in its National Infrastructure Strategy published at the end of last year, we do now have those steers in a range of areas. The fact that Government published the National Infrastructure Strategy in the face of enormous upheaval created by the Covid-19 pandemic is much to its credit.  

Within the National Infrastructure Strategy, the Prime Minister’s Ten Point Plan for a Green Industrial Revolution and the Energy White Paper, Government has set goals for many parts of the energy system.  These documents chart a course for the future of renewables, nuclear, hydrogen, heat and electric vehicles.  

These goals, alongside clarity on the pace and timetable for decarbonisation, are important to help businesses align their investment and planning decisions and to frame economic regulation. 

The Government has committed to deliver 40GW of offshore wind by 2030, which means the UK could be generating 65% of its electricity from renewable sources by 2030.  Near-term policy actions have been identified that will help to deliver this, including a commitment to holding Contracts for Difference auctions approximately every two years, ensuring these auctions are open to onshore and solar.  The Government is also considering the case for including more innovative technologies, such as floating offshore wind, in these auctions.  

The Government has also committed to large-scale trials of hydrogen for heating in homes and has set a target of 5GW of low carbon hydrogen production capacity by 2030.  At the same time, it has set a target of deploying 600,000 heat pumps per year by 2028 and has committed significant sums to improving the energy efficiency of England’s building stock.  However, early steps on this goal have been slower than hoped.

It is critical that these goals are now underpinned by specific policy levers and delivery plans with clear milestones.  Strategy documents promised this year for hydrogen and heating, alongside others on topics including electric vehicle charging infrastructure, provide the opportunity to set out such an approach.

Science and technology need to be unleashed to help tackle all the major policy challenges – around which there is broad political consensus

Practical delivery

These documents must provide detail on how noble ambition can be turned into practical delivery. When it comes to energy, the Commission would like to see Government: 

  • develop clear, actionable, and funded plans to deliver on commitments made in the Ten Point Plan and the National Infrastructure Strategy, including setting out next steps on heat decarbonisation and the development of a hydrogen industry; 
  • further improve energy efficiency schemes to deliver a material increase in the energy efficiency of the country’s building stock over the coming year. 

We also need to ensure our economic regulation is fit for achieving these major policy aims, and this year we hope to see Government develop a road map to legislate for net zero and collaboration duties for regulators.  We also look for mechanisms that will introduce more competition to facilitate strategic investment in utilities and to drive innovation, such as the need for intelligent systems to address future operating challenges in the electricity system.  Indeed, science and technology need to be unleashed to help tackle all the major policy challenges – around which there is broad political consensus, though naturally with some differences of emphasis.  

Of course, such decisions are being taken in the context of great uncertainty.  Even once policy decisions are made, individual infrastructure projects can face a range of challenges – from raising finance, to changes of scope, to local planning opposition.  These can best be mitigated through clear engagement with relevant stakeholders on the project rationale, and through taking longer at the project scoping phase to help reduce the chance that decisions need to be reopened later.  In my experience, taking longer at the start to focus on objectives tends to mean projects are delivered more quickly in the end.

At a macro level, the OECD’s International Transport Forum has recently recognised the value played by independent advisory bodies when it comes to helping governments develop long term infrastructure policy. The UK (including our sister bodies in Scotland and Wales) can stand proud as an exemplar in enabling impartial experts to inform political decision making.

Yet this only really means something when ­recommendations become delivery.  Ultimately, delay in implementing policy will inevitably mean delay in reaping economic and social ­benefits.

The action plans to achieve these goals are something that only Government itself can provide, but in partnership with industry and regulators as necessary – it would make no sense for unworkable plans to be imposed on sectors.  The challenges of reaching net zero in particular suggest both the need and opportunity for bipartisan and public/private collaboration on a whole new scale, echoing that achieved in the US economy in the run up to the Second World War.

I am optimistic that this year can see such progress.  The Commission exists to help keep up the pressure in a constructive fashion, to ensure the UK’s infrastructure is as well placed as it can reasonably be to face the challenges and opportunities of future decades.