Infrastructure body told to consider low-carbon rules

Posted on 01 November 2021

​The National Infrastructure Commission (NIC), which gives the government advice on projects, has been told it must support the transition to net-zero carbon emissions in its recommendations.

Chancellor Rishi Sunak wrote to NIC chair Sir John Armitt yesterday informing him of the new objective for the organisation. It comes after a Treasury review of the body’s role, responsibilities, and fiscal remit, resulting in the publication of a new framework agreement.

The new objective is “to support climate resilience and the transition to net-zero carbon emissions by 2050”.

A revised framework of its remit, published at the same time, said the NIC should “take account of the role of economic regulators in regulating infrastructure providers and the government’s legal obligations (e.g. carbon reduction targets or assessments of environmental impacts)”.

The body, which was formed in 2015, gives advice and offers recommendations to the government on infrastructure needs. Last December, it intervened on HS2 as it recommended that the line’s £32bn branch to Leeds should be delayed in favour of improving links between cities in the North and Midlands.

The chancellor’s letter, which was released at the same time as yesterday’s Autumn Budget and Spending Review, also said the commission will have to consider “potential interactions between its infrastructure recommendations, the government’s legal target to halt biodiversity loss by 2030 and implementing net biodiversity net gain”.

Sir John Armitt said the commission’s recommendations have “always reflected the importance of moving to a low-carbon economy”.

But he added: “We are pleased this objective has now been made explicit. Infrastructure will play a crucial role in achieving net-zero by 2050 and protecting biodiversity, and the commission stands ready to advise government on the necessary decisions ahead.”

The Treasury has also revised its fiscal remit for the body, which determines how the commission’s recommendations are funded. In 2016, then chancellor Philip Hammond set annual public investment in economic infrastructure at 1.0-1.2 per cent of GDP up to 2050.

However this has been increased to 1.1 per cent to 1.3 per cent of GDP from 2025 up to 2050.

Sunak wrote that the commission should ensure its recommendations are “clearly prioritised”.

He added: “While the need for sustained investment to match the government’s infrastructure objectives is clear, the government remains committed to fiscal sustainability, noting the enormous challenges posed by COVID-19 and the scale of the direct economic interventions that have been required since March 2020.”

The NIC said this change would inform its approach to the second National Infrastructure Assessment, due to be published in 2023.

Armitt added: “We are pleased that the chancellor has increased the funding envelope within which the commission formulates its recommendations.

“The fiscal remit ensures our work is grounded within a realistic fiscal context and helps ensure our independent policy recommendations are adopted. Raising the ceiling on the remit in this way could represent billions of pounds of extra funding for infrastructure over the long term.

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