Government set to change planning of major infrastructure schemes

We are entering a new era for nationally significant infrastructure projects, with new mechanisms for their planning being introduced by the government. But, without long term cross-party consensus, the industry cannot deliver the efficiency required. By Andrew Batterton, associate, Dickinson Dees.

It also considers that investment in infrastructure is key to unlocking its ambitious housing targets (three million new homes by 2020) and supporting economic development to stimulate new jobs and investment going forward.

Despite the current economic downturn, there has been no express indication that the government intends to change course and on the contrary it has indicated that significant public spending is needed to bring the construction sector out of recession. Some £3bn of public capital spending has been brought forward a year, of which £700m alone is set aside for transport infrastructure projects. Most recently, the long-delayed M25 widening PFI project has just been signed off and adds to other schemes such as Crossrail and the Thameslink metro lines.

However, commentators doubt whether this will be enough and the Royal Institute of Chartered Surveyors has issued its Q1 2009 UK Construction Market Survey stating that current construction activity on infrastructure projects has fallen further and workload expectations remain negative.

One assumes that the benefit of some of these major schemes will not be truly felt until the process of sub-contracting workload and appointing professionals is underway and work begins. The government will also be hoping that the impact of its national programme will be felt sector wide and will not be confined to principle contractors.

The government expects to bring forward other national infrastructure in the forthcoming months. Of course, the extent and rate at which it is willing and able to fund these projects will remain a hot topic of debate and can be expected to rank highly on the campaign agenda towards the next general election.

The government has also been keen to press ahead with proposals to change aspects of the policy and legal framework within which national projects above specified thresholds (classified as Nationally Significant Infrastructure Projects or NSIPs) will be brought forward, principally, to improve turnaround time. The changes are largely in response to the fiasco of Terminal 5, where the planning public inquiry alone lasted just less than four years.

The Planning Act 2008 was enacted in November last year and this will now enable the government to introduce regulations to create a more centralised Infrastructure Planning Committee (IPC), which will determine and advise local planning authorities in relation to the approval of planning permission and other consents including the compulsory acquisition of land required for NSIPs, all under one roof.

Efficient approach

The IPC will be empowered and encouraged to take a much more efficient and robust approach to the manner in which NSIP applications are determined, including the controlled use of hearings and pressing timetables. The aim is to establish the IPC as a legal body so that it is able to start advising potential applicants from autumn 2009 and be ready to receive applications in the first half of 2010.

Before the IPC can fully consider its first application, however, the government must introduce a national policy statement on the specific project by type which will set out the policy considerations to be taken into account by the IPC.

The government is currently consulting upon its nuclear policy as the first of a programme of 12 statements, which will include renewables, fossil fuels, electricity networks, oil and gas infrastructure, ports, roads and rail, airports, waste water, water supply and hazardous waste. Each policy statement will incorporate details of the identified need and may (as in the case of nuclear) incorporate a strategic site selection process to scale back the extent of the debate at the application stage.

It will be more important than ever for local authorities, landowners and anyone affected (including the construction industry) to have their say at the policy stage. The principal promoters of competing schemes will clearly input quite heavily at the policy making stage.

Opportunities for the rest of the construction sector will arise at the appropriate time, not least because promoters (who will invariably need to seek consent orders for the compulsory acquisition of land) will need to be able to demonstrate that there is reasonable prospect that they can deliver the scheme. In most cases, the size and nature of these schemes will require partner working and subcontracting, particularly where expertise is required.

Two points give rise to the most concern. The first is that the Conservatives have already indicated that they will scrap the IPC if they come to power and so the longevity of the IPC is already under threat.

The second is that with only being able to challenge decisions of the IPC and the government's emerging policy (beyond the consultation stage) in the courts, some are predicting that we are unlikely to witness decisions of the IPC free of challenge until well into 2012, which jeopardises the underlying purpose of a quicker system when it is arguably needed most.

The government has certainly embarked on an ambitious programme and has introduced a new streamlined legal process within which to operate it. What is needed now is some long term cross-party consensus on the subject if it is to instil confidence and encourage worthwhile forward planning by those in the construction sector. For the time being, the construction sector needs to be alive to the potential implications and progress of the programme of national policy statements and the establishment of the IPC.