In his Autumn Statement delivered on 23 November 2016, the Chancellor of the Exchequer, Phillip Hammond, gave several key updates in relation to energy and infrastructure.
The government is keen to place infrastructure at the heart of its economic strategy and has set up the National Infrastructure Commission (NIC) to provide expert advice on the country’s strategic infrastructure needs and make recommendations to ensure investment decisions are targeted at the UK's most pressing infrastructure needs. The government set NIC fiscal parameters mean that recommendations will be based on the assumption that spending on infrastructure will lie between 1% and 1.2% of GDP each year from 2020 to 2050. This is intended to promote a sustained, long-term increase in infrastructure investment.
The government is continuing to back infrastructure projects through the UK Guarantees Scheme, which to date has supported over £4 billion worth of investment. As well as this, it is committed to developing a new pipeline of projects which are suitable for delivery through the PF2 Public Private Partnership scheme and will present the list of projects to make up the initial pipeline in early 2017.
A new ministerial group, the Infrastructure and Projects Authority (IPA), is to be established, which will be headed up by the Chief Secretary to the Treasury and will oversee the delivery of priority infrastructure projects. The IPA has been tasked with identifying ways in which the government, working in coalition with industry, can improve the quality, cost and performance of UK infrastructure. It is anticipated that the IPA will report on this in summer 2017.
The government anticipates that there will be more than £100 billion of private investment in the energy sector over the next 15 years allowing for the development of new cleaner generating capacity, a smarter energy system and new resources such as shale. Following the Shale Wealth Fund consultation in August 2016 (https://www.gov.uk/government/consultations/shale-wealth-fund), aimed at ensuring that local communities share in the benefits of shale production, the government has announced that the SWF will provide up to £1 billion of additional resources to local communities, over and above industry schemes and other sources of government funding.
These announcements signify that the government is keen to re-commit itself to developing a strong infrastructure, which is both affordable and sustainable in the long term. To access the government's full Autumn Statement please follow the link below: https://www.gov.uk/government/publications/autumn-statement-2016-documents/autumn-statement-2016#fn:27
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