Partner London
"This new body is aimed at addressing delays and inefficiencies that have marred the UK's global reputation with investors."
Introduction of NISTA
Darren Jones, Chief Secretary to the Treasury, speaking at Skanska’s headquarters on 10 October 2024, announced the formation of NISTA, emphasising the need to “get a grip” on infrastructure delays. NISTA will be designed to address the persistent delays and inefficiencies in the country’s infrastructure development.
NISTA aims to revolutionise the approach to infrastructure projects by consolidating the functions of the National Infrastructure Commission (“NIC”) and the Infrastructure and Projects Authority (“IPA”). This restructuring is part of a broader governmental effort to overcome the cycle of underinvestment and instability that has plagued UK infrastructure, contributing to its historically low ranking among G7 nations for investment. NISTA’s creation reflects a strategic response to the systemic delivery challenges identified in recent reports, which highlight issues such as a lack of strategic clarity, risk aversion and industry fragmentation as key barriers to timely and cost-effective project completion.
NISTA’s main objective is to unify infrastructure strategy and delivery under one cohesive framework, thereby restoring investor confidence and driving economic growth. By bringing together strategic oversight and project execution, NISTA seeks to facilitate the effective development and implementation of a ten-year national infrastructure strategy. This strategy will not only focus on essential economic infrastructure such as transport and energy but also extend to social infrastructure, including schools and hospitals, which are vital for supporting a modern economy. Additionally, NISTA aims to establish a stronger partnership between the public and private sectors, leveraging the National Wealth Fund to unlock private investment and foster long-term growth. Through these initiatives, NISTA endeavours to provide the stability and clarity necessary for sustained infrastructure development, ultimately enhancing the UK’s global standing in infrastructure investment and delivery.
Challenges Addressed
"According to a report by the National Infrastructure Commission, several systemic issues have contributed to these challenges."
The UK has grappled with a persistent cycle of underinvestment and instability in its infrastructure sector, leaving it at the bottom of the G7 nations in terms of infrastructure investment. This chronic underinvestment has not only undermined the UK’s competitiveness on the global stage but also hindered the efficient delivery of vital infrastructure projects. According to a report by the National Infrastructure Commission, several systemic issues have contributed to these challenges. A notable lack of strategic clarity has resulted in project delays, whilst risk aversion among stakeholders and fragmentation within the industry have further inflated project costs. These issues have compounded over the years, creating a complex landscape where infrastructure projects struggle to meet timelines and budgetary constraints.
Jones has underscored the critical role infrastructure plays in the nation’s economy. It serves as a lifeline, connecting people to opportunities and businesses to the talent they need, thereby facilitating economic growth. However, the current state of the UK’s infrastructure system is akin to a vehicle in dire need of an “MOT” – a thorough inspection and overhaul. The inefficiencies and delays plaguing the system have eroded investor confidence, making it imperative to restore trust and foster an environment conducive to long-term investment. By addressing these foundational challenges through the establishment of NISTA, the government aims to create a more stable and strategic framework that will enable the UK to rebuild its infrastructure and, consequently, its economic future.
Strategic Vision
The government will publish a ten-year infrastructure strategy that will see to revitalise both economic and social infrastructure across the country. This long-term plan will focus on enhancing transport and energy systems, which are crucial for economic growth, whilst also prioritising the development of social infrastructure such as schools and hospitals to support a thriving modern society. A key component of this strategy is fostering a new, collaborative relationship with the private sector to unlock significant investment opportunities. The National Wealth Fund will play a pivotal role in this endeavour, providing substantial public funding to be leveraged alongside private capital. By aligning public and private sector efforts, the strategy aims to ensure a coordinated and strategic approach to infrastructure development, paving the way for sustainable growth and improved quality of life across the UK.
Planned Effect on the Infrastructure Industry
NISTA is set to significantly impact the UK infrastructure industry by improving the delivery of major projects such as HS2 and the TransPennine Route Upgrade. By providing strategic oversight, it aims to streamline the infrastructure development process, ensuring more effective regulation, precise specification, and robust cost management throughout the supply chain. This enhanced oversight is expected to mitigate delays and cost overruns, fostering a more efficient project execution landscape.
Complementing NISTA’s efforts, the forthcoming Planning and Infrastructure Bill will simplify the consenting process for infrastructure projects, offering developers greater certainty and reducing bureaucratic hurdles. Together, these initiatives are designed to create a more predictable and supportive environment for infrastructure development, encouraging investment and enabling the UK to better meet its infrastructure needs.
Rebuilding Trust and Confidence
Jones emphasised the critical need to rebuild trust with investors by ensuring that the government’s infrastructure plans are both reliable and deliverable. This renewed focus on trust is central to the new strategy, which aims to provide a stable foundation for infrastructure development, moving away from the chaotic approaches of the past. By fostering an environment of transparency and accountability, the government seeks to reassure investors that their contributions will be met with predictable and effective execution. This strategic shift not only aims to restore confidence in the UK’s infrastructure initiatives but also to lay the groundwork for sustained long-term growth, positioning the nation as a dependable partner in global infrastructure investment.
"As the government rolls out its ten-year infrastructure strategy, the focus will be on aligning public and private sector efforts to ensure resilient growth."
Conclusions and Future Vision
The establishment of NISTA represents a significant shift in the UK’s approach to infrastructure development. By consolidating oversight and delivery functions, the government aims to overcome historical challenges related to strategic clarity and investment delays. For contractors and employers, this could mean more efficient project approvals, a clearer regulatory environment, and increased opportunities for private investment.
As the government rolls out its ten-year infrastructure strategy, the focus will be on aligning public and private sector efforts to ensure resilient growth. This strategic alignment, paired with improved project management and oversight, promises positive outcomes for the UK’s infrastructure landscape. Looking forward, NISTA’s success will depend on its ability to foster collaboration, drive innovation, and maintain its commitment to delivering tangible results in infrastructure development.
It is noticeable, that the above announcements coincided with the NIC’s publication of a new report, “Cost drivers of major infrastructure projects in the UK“, which seeks to identify the causes of cost inflation on major infrastructure projects. It remains to be seen what effect the new changes will have on costs of infrastructure projects in the future.
Jones captured the essence of this transformation, stating, “This new body will get a grip on the delays to infrastructure delivery that have plagued our global reputation with investors. It will restore the confidence of businesses to invest and help break the cycle of low growth.” With this foundation, the UK aims to build a robust infrastructure that supports a return to a flourishing economy that supports a modern society.
Should you have any questions or require further insight into how this development may impact your own business or ongoing projects, please do not hesitate to reach out to the authors or your usual WFW contact.
