Fiona Harvey, Gwyn Topham and Jillian Ambrose
Thu, 16 May 2024 at 12:00 am GMT-6·5-min read
Rishi Sunak’s changes to key policies had created uncertainty and delay, said Armitt.Photograph: UK Parliament/AFP/Getty Images
Rishi Sunak’s U-turns over net zero have delayed progress on vital infrastructure that is needed for economic growth, the government’s advisers have said.
Sir John Armitt, the chair of the National Infrastructure Commission (NIC), said good progress had been made on renewable energy in the past five years, but changes to key policies, including postponing a scheme to boost heat pump takeup, had created uncertainty and delay.
He said the government could no longer “duck key decisions”, as Britain was falling behind on vital infrastructure, from rail transport and energy to water, flood defences and waste.
Failure to catch up would stymie economic growth, and imperil climate targets, the NIC found in its latest annual review.
Since last September, when he watered down key net zero policies, Sunak has repeatedly referred to the need to be “pragmatic” on net zero.
Armitt said: “I can understand the need to seek to be pragmatic, but every time you seek to be pragmatic you take your foot off the gas and you provide an encouragement to people to say: ‘Well, do I really need to do this?’
“The message clearly has to be that this is something we’ve got to do if we believe in our carbon targets.”
He said heat pumps in particular, which the NIC found to be the only viable alternative to gas boilers for home heating, must be a top priority.
The NIC found:
The government will fail to meet its targets on heat pump rollout.
The promised lifting of a ban on new onshore windfarms has not gone far enough.
Massive investment is needed in the electricity grid.
There is no proper plan for rail in the north and Midlands now that the northern leg of HS2 has been cancelled, severely inhibiting economic growth in those regions.
Water bills will need to go up to fix the sewage crisis, and more reservoirs are needed to avoid drought, while water companies have done too little to staunch leaks.
The UK lacks a coherent strategy on flooding, with more than 900,000 properties at risk of river or sea flooding and 910,000 at risk of surface water flooding.
Good progress has been made on the rollout of gigabit broadband around the country.
Armitt called for this government, and the next, to act swiftly. “It’s not too late to catch up in many of the areas we’ve highlighted, if the goals are matched with policies of sufficient scale. But the window is closing,” he said.
“Ducking big decisions over the next 12 months will put the major goals of net zero, regional economic growth, and environmental protection in jeopardy,” he warned.
Greater investment was needed in public transport, the NIC found. Uniquely in Europe, the UK’s second and third cities showed lower economic productivity than the national average, largely because of poor transport links, the review found.
The axing of the next phases of the HS2 high-speed rail project left a “critical gap” in rail connectivity between the Midlands and the north, with northern cities likely to “remain poorly served” without further investment.
Given long-term growth in demand “a do-nothing scenario north of the proposed connection of HS2 and the west coast mainline at Handsacre is not sustainable”, the report found.
The target of rolling out 600,000 heat pumps a year by 2028 to reach 7m homes by 2035 was way off track, the report found, while putting off a decision on hydrogen for home heating until 2026 had created uncertainty.
The next government should end new connections to Britain’s gas network from 2025, and ban the sale of new gas boilers for homes and fossil fuel heating in large commercial buildings by 2035, according to the report. It also called on the government to rule out subsidies for hydrogen heating.Interactive
These commitments should be underpinned by steps designed to make heat pumps more affordable for households, including sufficient funding, and a plan to shift the burden of policy costs from electricity bills to either gas bills or into general taxation.
Armitt stopped short of calling for force-fitting heat pumps and smart meters in a street-by-street programme – put forward earlier this month by Chris O’Shea, the chief executive of British Gas parent company Centrica – saying it was difficult to do “from top down” while maintaining public trust. He added that other low-carbon home heating options – such as heat networks – should also be considered in areas where they made sense.
The greatest challenge to the UK’s green electricity goals, according to the review, is the need to upgrade the country’s transmission infrastructure. The bottleneck of renewable projects waiting to connect to the grid has already increased costs for households. By 2030, network constraint costs are estimated to rise to between £1.4bn and £3bn a year, unless grid capacity is expanded.
A government spokesperson said: “We’re making sure we have the infrastructure we need to grow the economy, improve people’s lives, and tackle climate change – having already increased electricity generated from renewable sources to nearly half in 2023, giving more powers to cities to build the transport they need, and providing billions to tackle potholes up and down the country.”
Window closing to deliver infrastructure that will improve lives, advisers warn
Emily Beament and Neil Lancefield, PA
Wed, 15 May 2024
The window is closing to deliver infrastructure to improve people’s lives, boost growth and tackle climate change, Government advisers have warned.
The National Infrastructure Commission (NIC) said there are “significant deficiencies” in the UK’s infrastructure, including a failure to build reservoirs, too many homes at risk of flooding and under-investment in regional transport.
Commission chairman Sir John Armitt said it is a critical period for making decisions on things that are of immediate concern to the public, which he characterised as the three Ps of “prices, potholes and pollution”.
The Government will need to increase public investment in infrastructure and boost private investment – which in a globally competitive market requires stable policy to attract investors, the commission argued.
The Government must make faster decisions and commit to them in the long term, with robust implementation plans and action to remove barriers that slow down delivery and increase the costs of infrastructure.
It has warned public funding will need to reach around £30 billion a year over the coming decades, from around £20 billion a year in the past decade, while private investment will need to rise to around £50 billion a year.
In an annual review of progress, the advisory body said the Government had faced several years of disruption from shocks such as the pandemic and the energy crisis.
It now needs to accelerate planning and delivery to catch up and ensure the country’s infrastructure is fit for purpose, to cut emissions to net zero, boost regional growth and make the UK more resilient to climate change.
Sir John said: “A window remains to ensure that practical delivery plans are in place, backed up by the necessary public and private funding, to help achieve economic and environmental goals that will improve life for British households.
“But the window is closing, at least if we don’t want to delay those benefits and compound the disruption of recent years.”
The commission said there are still unacceptably high levels of water pollution, and investment decisions are needed to enable “transformational change” in the sector – that would require some bill increases – to address sewage and drainage problems.
The commission warns the take-up of heat pumps for home heating systems has been too slow (Alamy/PA)
It called for action to enable new reservoirs, tackle too-high levels of leaks and reduce water demand, warning they are the only ways of reducing the risk of severe drought and avoiding consumers having to pay for emergency supply measures.
On flooding, the commission warned current funding is not being strategically directed, with no long-term targets to measure progress against.
Flood risk is worsening due to poor planning for new development and “unmanaged” growth in hard surfacing that stops water draining away.
The report also warned the UK remains “too reliant” on high cost, high carbon natural gas, but it could move away from fossil fuels and have decarbonised and secure energy.
Moving away from gas heating will be essential for reducing carbon emissions in homes, as well as improving air quality and permanently reducing heating costs for households, the report said.
The solution for cutting emissions from most homes is heat pumps, but the Government is not on track to roll out 600,000 of the clean heating systems a year by 2028, it said.
Last minute policy changes on heating have reduced the incentives for people to install heat pumps, while uncertainty over the role of hydrogen has also contributed to slow progress away from fossil fuel heating.
Sir John Armitt is chairman of the National Infrastructure Commission (PA)
The Government should rule out supporting hydrogen for heating and set out long-term funding and 0% financing to support deployment of heat pumps and heat networks, it argued.
The cost of electricity has to be rebalanced to make electric heating more cost effective, and there should also be further moves to boost renewables such as onshore wind projects.
On transport infrastructure, the NIC found Government plans for schemes to boost connectivity using money saved from scrapping HS2 north of Birmingham need “greater specificity” regarding their “scope, cost, benefits and schedule”.
The commission’s analysis also suggested there are “key corridors which will remain poorly served”, such as from Birmingham to Manchester and the rest of north-west England.
Capacity and connectivity north of Birmingham “cannot be materially improved” without further infrastructure investment, the report added.
Devolution needs to be expanded to give all local authorities with responsibility for local transport five-year funding settlements to enable more stable planning for road maintenance and other priorities
In a “mixed” report which highlighted good progress on the rollout of digital networks, there is also a warning that recycling rates have stagnated and emissions from waste remains too high, with a call for implementing reforms to meet the target to recycle 65% of rubbish by 2035.
James Heath, NIC chief executive, said the report reiterates a package of measures outlined in the commission’s second assessment last year for the next five years which is “deliverable and affordable”.
He added: “It’s the package that is necessary to close the gap in the UK between the infrastructure assets we have today and those we’re going to need in the future.”
A Government spokesperson said: “We’re making sure we have the infrastructure we need to grow the economy, improve people’s lives, and tackle climate change – having already increased electricity generated from renewable sources to nearly half in 2023, giving more powers to cities to build the transport they need, and providing billions to tackle potholes up and down the country.
“And we’re building on this by setting out our long-term plan for transport through our £36 billion Network North plan, while putting billions more investment into the low carbon transition, including through our Boiler Upgrade Scheme – which is one of the most generous in Europe.”
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