CCS001 CCS0618917350-001 NIC-NIA Accessible-1

NATIONAL INFRASTRUCTURE
ASSESSMENT
NATIONAL
INFRASTRUCTURE
COMMISSION
July 2018
IMAGE CREDITS:
Solar Farm, Abingdon – Belectric
Prince of Wales bridge – Highways England
Pudding Mill sewage pump station - Lyall, Bills & Young Architects
National Infrastructure Commission | National Infrastructure Assessment
Contents
The Commission 2
Foreword3
In brief 5
Executive summary 6
1. Building a digital society 17
2. Low cost, low carbon 31
3. Revolutionising road transport 51
4. Transport and housing for thriving city regions 67
5. Reducing the risks of drought and flooding 83
6. Choosing and designing infrastructure 99
7. Funding and financing 109
8. Next Steps 125
Annex A: Glossary 131
Annex B: Acknowledgements 142
Annex C: Supplementary documents 151
Annex D: Recommendations 154
1
The Commission
The National Infrastructure Commission was established in 2015 to provide

independent, impartial advice on the UK’s long term infrastructure needs.
As of July 2018, the Commission’s members are:
Sir John Armitt CBE (Chair) published an independent review on long-term
infrastructure planning in the UK in September 2013, which resulted in the National
Infrastructure Commission. Sir John is chairman of the National Express Group and
the City & Guilds Group and sits on the boards of the Berkeley Group and Expo 2020.
Dame Kate Barker sits on the boards of Taylor Wimpey plc and Man Group plc. She
is also chair of trustees for the British Coal Staff Superannuation Scheme. She has
previously served as an external member of the Bank of England’s Monetary Policy
Committee (2001-2010).
Professor Sir Tim Besley CBE is School Professor of Economics and Political Science
and W. Arthur Lewis Professor of Development Economics at the LSE. He has
previously served as an external member of the Bank of England Monetary Policy
Committee (2006-2009).
Professor David Fisk CB is Emeritus Professor at the Centre for Systems Engineering
and Innovation at Imperial College London. He has served as Chief Scientist across
several Government departments including Environment and Transport, and as a
member of the Gas and Electricity Markets Authority.
Andy Green holds several Chairman, Non-Executive Director and advisory roles,
linked by his passion for how technology transforms business and people’s daily
lives. This includes chairing IG Group, a global leader in online trading and Digital
Catapult, an initiative to help grow the UK digital economy.
Professor Sadie Morgan is a founding director of the Stirling Prize winning
architecture practice dRMM. She is also chair of the Independent Design Panel for
High Speed Two, is deputy chair of the Thames Estuary 2050 Growth Commission
and a Mayor’s design advocate for the Greater London Authority.
Julia Prescot is co founder and Chief Strategy Officer of Meridiam, and sits on
the Executive Committee of Meridiam SAS. She has been involved in long term
infrastructure development and investment in the UK, Europe, North America
and Africa.
Bridget Rosewell OBE is a director, policy maker and economist. She has served as
Chief Economic Adviser to the Greater London Authority (2002-2012) and worked
extensively on infrastructure business cases. She is a director of Network Rail.
2
Foreword
The infrastructure we have now, and the infrastructure we plan to build, will
support and sustain us for decades to come. Our quality of life, and our success as
an economy in the future, will depend on our infrastructure’s ability to respond to
future challenges. This will rely on decisions taken now.
Providing the right infrastructure for the future does not just entail delivering the
running water, roads and rail that traditionally spring to mind, although these are
important. The UK needs fast, reliable internet connections. It needs low cost
energy and transport that doesn’t harm the planet. It needs to make cities liveable
for the growing urban population. It needs to reduce the plastic waste that can end
up in our oceans. It needs water supply and flood defences that can respond to the
risk of extreme floods and drought. All this needs to be done in a way that is well
designed, and affordable for the government and the public.
Over the last 50 years, the UK has seen an endless cycle of delays, prevarication and
uncertainty. These have been driven in part by short term considerations, and the
lack of a cross-sectoral approach to infrastructure. This approach has limited growth,
undermined job certainty, and restricted innovation. And too often the UK has
ended up playing catch up. This will not do for the challenges ahead.
In the National Infrastructure Assessment, the first of its kind, the Commission
has been able to look across infrastructure sectors, and come to independent
conclusions based on the best available evidence. The Assessment sets out a
clear, long term strategy for the UK’s economic infrastructure from 2020 to 2050,
providing long term clarity for industry and the supply chain.
The Commission’s interim report, published in October 2017, identified three
headline challenges for the UK’s infrastructure: congestion, capacity and carbon.
The Assessment’s recommendations to government tackle congestion by
prioritising devolved, stable, long-term funding for urban infrastructure in cities.
The recommendations will improve the capacity of our water supply and digital
infrastructure. And they will reduce our carbon emissions by leading the move to
an energy system that is powered mainly be renewable energy sources such as solar
and wind.
However, this is not all: the recommendations will also improve our quality of life by
reducing air pollution, protecting our homes from floods, and making cities better
places to live. The cost of driving will fall substantially if people can switch to electric
vehicles. And they will help the environment by reducing waste that ends up in our
landfills, incinerators and oceans.
3
Over the course of preparing this Assessment, the Commission has consulted and
listened to the public, industry, academics, local and national government. Our
analysis and proposals will not satisfy everyone. But the recommendations represent
our considered view of how we can best create infrastructure which enables a fair,
productive and green society for the whole country.
Ensuring that the Commission’s recommendations can deliver the benefits we
think they can, will require politicians across all parties to build a consensus. We
welcome the funding guidelines that government has set for the Commission’s
recommendations, and have made our recommendations in line with it. We have also
taken into account existing government commitments for road, rail and aviation, as
well as all of our previous recommendations. We look forward to the government
adopting our programme of recommendations as policy, and committing to invest in
our infrastructure over the coming years.
I would like to take this opportunity to thank my fellow Commissioners and the
excellent team at the Commission secretariat, in particular its Chief Economist,
James Richardson, who has led the development of this Assessment from start to
finish. I would also like to thank everyone who has contributed to our work over
the last two years. We look forward to the response from government and the
wider community.
Sir John Armitt CBE

Chair, National Infrastructure Commission
4
In brief
The first National Infrastructure Assessment sets out the Commission’s plan of
action for the country’s infrastructure over the next 10-30 years. Infrastructure
can inspire confidence and growth. But long term projects require a long-term
vision, lasting plans, and stable funding. The UK must take decisive action.
The Commission’s recommendations represent a significant programme of upgrades
to the nation’s infrastructure. But they are not an unaffordable wish list. They have
been costed in line with the government’s guideline for investment in infrastructure.
And they are affordable for households and businesses.
The Commission was set up to address the lack of a long term infrastructure strategy,
siloed decision making in infrastructure sectors, fragile political consensus and
short termism. The Commission has addressed these issues by taking a long term,
cross‑sectoral approach, with in-depth analysis and wide consultation.
The government has committed to respond to the Commission’s recommendations
and to adopt agreed recommendations as government policy.
The recommendations set out a pathway for the UK’s economic infrastructure:
ll nationwide full fibre broadband by 2033
ll half of the UK’s power provided by renewables by 2030
ll three quarters of plastic packaging recycled by 2030
ll £43 billion of stable long term transport funding for regional cities
ll preparing for 100 per cent electric vehicle sales by 2030
ll ensuring resilience to extreme drought
ll a national standard of flood resilience for all communities by 2050.
Alongside these, better design and more efficient funding and financing can save
money, reduce risk, add value and create a legacy that looks good and works well.
These recommendations will equip the UK with the infrastructure it most needs.
The Commission will continue to work to build consensus. It will hold government
to account for the implementation of its recommendations. And it will continue
to work on the nation’s most pressing infrastructure issues.
5
Executive summary
The UK must take decisive action to have world leading

infrastructure. Infrastructure can inspire confidence and
growth. But long term projects require a long term vision,
lasting plans, and stable funding.
Too often, the delivery of the UK’s major infrastructure projects has been slow
and uncertain. Airport expansion in the south east is the best known, but not
the only, example. The Mersey Gateway Bridge, which opened in October 2017,
was proposed in 1994. Crossrail, due to open this year, was originally proposed
in 1974. Consequently, much of the country’s infrastructure has not kept pace
with population growth, demand and advances in technology. The UK must stop
running to stand still.
The National Infrastructure Commission was set up to address the problems with
long term infrastructure planning in the UK. This first National Infrastructure
Assessment builds on the analysis in the Commission’s interim report,
Congestion, Capacity, Carbon: Priorities for national infrastructure, to set out a
long term vision for high quality, good value, sustainable economic infrastructure
for the UK, and a clear plan to achieve it.
Its core proposals include:
ll nationwide full fibre broadband by 2033
ll half of the UK’s power provided by renewables by 2030
ll three quarters of plastic packaging recycled by 2030
ll £43 billion of stable long term transport funding for regional cities
ll preparing for 100 per cent electric vehicle sales by 2030
ll ensuring resilience to extreme drought through additional supply and
demand reduction
ll a national standard of flood resilience for all communities by 2050.
It also highlights the most important future challenges. Heating must no longer
be provided by natural gas, a fossil fuel. The UK must prepare for connected and
autonomous vehicles. These need more time for evidence or technology to develop.
The Assessment sets out the actions needed to enable robust decisions to be taken
in future.
6
The National Infrastructure Assessment

The Commission is required to carry out an overall assessment of the UK’s infrastructure
requirements once every 5 years. This is the first of those assessments. It covers all the key
sectors of economic infrastructure, setting out recommendations for transport, energy, water
and waste water, flood resilience, digital connectivity, and solid waste, from now until 2050.
The Commission’s remit also includes the potential interactions between its infrastructure
recommendations and housing, but not housing supply in general. The Assessment is guided by
the Commission’s objectives to support sustainable economic growth across all regions of the
UK, improve competitiveness and improve quality of life. More information can be found in the
Commission’s framework document.
Thinking long term

By 2050, the UK’s population and economy will have grown significantly. This will place substantial
pressures on infrastructure. And meeting the challenge of climate change will require a
transformation in energy, waste and transport by 2050. Even so, the effects of climate change will
still be felt, with higher average temperatures and increased risk of drought and flooding. The
UK’s infrastructure will need to adapt to these pressures. The Assessment provides a long term
strategy for how to do this. More information can be found in the Commission’s four papers on
the environment and climate change, economic growth, population change and demography,
and technological change.
How has the Commission come to these conclusions?

The strategies have been developed considering the responses to the Commission’s consultation
in Congestion, Capacity, Carbon: Priorities for national infrastructure, working closely with
experts and other independent organisations, seeking diverse views across sectors and regions,
asking the public for their views (via a social research programme), and through the Commission’s
own internal analysis and modelling. More information and consultants’ reports can be found on
the Commission’s website.
How much will this all cost?

Government has given the Commission a long term funding guideline for its recommendations
(the ‘fiscal remit’). Where infrastructure is funded by the private sector, and the costs of any
recommendations will ultimately be met by consumers, the Commission is also required to
provide a transparent assessment of the overall impact on bills. These are set out in Chapter 7.
More information on the Commission’s fiscal and economic remit can be found in the
Commission’s remit letter.
7
The Commission’s recommendations represent a major long term programme

of investment in the UK’s infrastructure. The programme includes substantial
funding for major schemes such as Crossrail 2 and Northern Powerhouse Rail, as
well as to support the delivery of enhanced digital networks and flood protection.
The Assessment has been made in the light of existing infrastructure plans and
investment. However, this is not an unaffordable wish list, but has been carefully
designed to be consistent with the government’s long term funding guideline
for public investment in infrastructure. Where infrastructure is funded by the
private sector, a transparent assessment is provided of costs and savings for each
recommendation to ensure that consumer costs are manageable and proportionate
to the benefits the infrastructure provides.
The recommendations in this Assessment have all been guided by the objectives
set for the Commission by government to: support sustainable economic growth
across all regions of the UK; improve competitiveness; and improve quality of life.
They have been designed to stand the test of time, and to be robust to a variety of
scenarios. Together they comprise an ambitious plan to modernise and enhance the
UK’s economic infrastructure.
The Assessment’s recommendations do not simply comprise a list of projects for
the government to build; good infrastructure requires long term planning, stable
funding structures and good design. The Commission has also been able to consider
interdependencies between sectors: urban infrastructure planning needs to be
integrated with housing; the energy system needs to be prepared for an increase in
electric vehicle ownership; and digital connectivity on the roads could be necessary
for connected and autonomous vehicles.
Further detail on the Commission’s analysis is set out in the technical annexes
published alongside this report, the Commission’s interim report and background
papers, and the 31 reports commissioned for the Assessment, available on the
Commission’s website. Annex C sets out a list of these supplementary documents.
Good infrastructure is essential to the country’s future growth and prosperity.
Infrastructure is a key pillar of the government’s Industrial Strategy. Now is the time
to deliver. This Assessment is the plan of action.
Building a digital society

Data and digital connectivity will increasingly drive the country’s economic growth,
competitiveness, and quality of life. Digital communication makes it easier for
customers and suppliers to find each other and exchange goods and services. In
future, innovations such as artificial intelligence and the internet of things will bring
new applications that rely on digital connectivity, from driverless cars to increased
use of virtual reality. Some health services are already moving online, providing
better access to specialist services, and reducing the need for patients to sit in
waiting rooms where they risk further infection.
8
The UK already has a strong digital economy underpinned by an extensive

broadband network. But the superfast broadband programme that delivered this is
coming to an end. While current digital connectivity is enough for current needs,
demand for data is rapidly increasing; superfast broadband may not be sufficient for
the future.
The Commission’s judgement is that the government should act now to deliver
full fibre across the country; in the Commission’s social research, 86 per cent of
people agreed that all parts of the UK should have equal access to broadband. Full
fibre broadband is the likely next step in digital connectivity. It is more reliable and
cheaper to maintain than today’s part copper, part fibre broadband connections.
But it will take at least a decade to build nationally. Government needs to make a
decision on full fibre now to avoid the risk of the UK being left behind in years to
come. Full fibre will deliver benefits compared to current broadband even if the
expected demand growth does not materialise. Enhanced digital connectivity will
also facilitate the development of smart infrastructure: infrastructure with digital
connections, enabling more efficient management and maintenance.
To encourage full fibre rollout, the government should put in place a national
broadband plan by the end of 2018. Ofcom should provide certainty to commercial
investors and encourage further private sector delivery of full fibre. With this
certainty from government and Ofcom, most urban areas are likely to receive full
fibre just through the promotion of market competition. However, full fibre will
still need to be subsidised in some areas where commercial players are unlikely to
deliver it. This should begin with the locations least likely to receive broadband
commercially. With these plans in place, nationwide full fibre connectivity should be
available no later than 2033.
Low cost, low carbon

The UK can and should have low cost and low carbon electricity, heat and waste. Ten
years ago, it seemed almost impossible that the UK would be able to be powered
mainly by renewable energy in an affordable and reliable way. But there has been a
quiet revolution going on in this area. There is ample scope to build on this success
in years to come. Highly renewable, clean, and low cost energy and waste systems
increasingly appear to be achievable.
Furthermore, such a system need not lead to higher bills. Today, consumers pay an
average of £1,850 per year for the energy they use, including fuel and equipment for
heating and hot water, electricity and transport fuel costs. The same services could
be delivered at the same cost (in today’s prices) in 2050 by a low carbon energy
system. But this will only be possible if the right decisions are taken now.
Sustaining progress on reducing emissions requires government to show ambition.
The crucial first step is to enable an increasing deployment of renewables. The
Commission’s modelling has shown that a highly renewable generation mix is a low
cost option for the energy system. The cost would be comparable to building further
nuclear power plants after Hinkley Point C, and cheaper than implementing carbon
9
capture and storage with the existing system. The electricity system should be
running off at least 50 per cent renewable generation by 2030, as part of a transition
to a highly renewable generation mix. Government should not agree support for
more than one nuclear power station beyond Hinkley Point C before 2025.
But there are some changes that will need to be made to enable the increase
in renewables. It will require increased system flexibility, in line with the
recommendations in the Commission’s Smart Power report. The Commission favours
the use of existing market mechanisms – contracts for difference and the capacity
market – where possible, to avoid creating more uncertainty, but incremental
improvements could be made. All renewables should be able to compete; there is no
longer a case for any bilateral deals, including for tidal.
Even with emissions almost eliminated from power generation, the UK cannot
achieve its emissions targets while relying on natural gas, a fossil fuel, for heating.
Delivering a low cost, low carbon heating system is the major outstanding challenge.
But the electricity system represented just such a challenge ten years ago. There are
actions that the UK can and should take now.
As a first step, improving the energy efficiency of the UK’s buildings will mitigate
some of the emissions from heat. In the meantime, the evidence base must be built
up to make decisions on heat in future. The safety case for using hydrogen as a
replacement for natural gas should be established, followed by trials for hydrogen
at a community scale and alongside carbon capture and storage. At the same time,
further data on the performance of heat pumps in the UK should be collected and
used to support decisions.
In the waste sector, too, there are lower cost, lower carbon options especially for
food waste and plastics. There is public support for greater recycling, but frustration
with the complexity of the process.
It is cheaper to collect food waste separately and process it in anaerobic digesters,
rather than send it to energy from waste plants (incinerators). Seventy nine per
cent of people who do not currently use a food waste bin would be prepared to
use one if it were provided by their local council. More plastics should be recycled,
including by restricting the use of hard-to-recycle plastic packaging by 2025. Better
packaging design, clearer labelling, fewer hard to recycle plastics, and tougher
recycling targets (of 65 per cent of municipal waste and 75 per cent of plastic
packaging by 2030) could all reduce residual waste and mitigate the need to build
additional infrastructure.
Revolutionising road transport

By 2050, road transport will be unrecognizable from today. Cars and vans will be
electric, and increasingly autonomous. Electric, connected and autonomous
vehicles will change the nature of the transport debate in the UK.
Electric vehicles are easier to drive, quieter and less polluting than conventional
cars and will soon have the same range and be cheaper to buy and maintain. Once
10
this happens, their take up could increase rapidly. Given their benefits for the
environment, this is something government should encourage. A key way to do this
is by ensuring that charging an electric vehicle is as easy as refilling a conventional
vehicle, or even easier.
The government needs to provide the right environment to support and encourage
the switch to electric vehicles. To catalyse this, consumers need to feel confident
that they can charge their electric vehicles en route across the country. A core
network of fast or rapid chargers should be installed in visible locations across the
UK. Government should subsidise charger installation where the private sector will
not build them, starting in the locations least likely to be delivered commercially.
However, the majority should be built by the private sector. Government should
enable commercial investors to build charge points throughout the country,
including by requiring local authorities to free up 5 per cent of their parking spaces
for electric vehicle charge points by 2020, and 25 per cent by 2025.
The energy system will also need to be prepared for an increase in demand for
electricity as the transition to electric vehicles gains traction. Whilst fast and rapid
chargers will be needed to tackle range anxiety, most charging should be slow and
smart. Done in the right way, using smart charging, electric vehicles can lower
electricity system costs: the system will be able to operate closer to full capacity over
the course of the day, as electric vehicles can charge primarily at night, increasing
network efficiency. And with electric vehicles providing a source of flexible demand,
the need for other kinds of flexibility such as battery storage or fossil fuels will
be reduced.
In the longer term, connected and autonomous vehicles will bring even greater
changes to the UK’s roads. They will improve safety, and could allow more people to
use personal transport and free up driving time for work or leisure. They may even
encourage a shift towards increased vehicle sharing and reduced car ownership.
Traffic lights and stop signs may become unnecessary, speed limits could be
higher, and the use of road space could be automatically and constantly changing
according to need. But, with road and rail projects lasting for decades, government
needs to start taking the potential future impacts into account now as it makes
investment plans.
A framework should be developed to assess potential impacts, even though these
are inevitably uncertain. An initial framework should be put together before the next
five year planning cycle for rail and major roads begins in the early 2020s.
Transport and housing for thriving city regions

Cities can be great places to live, with excellent public transport systems, well-
designed public spaces for leisure and social activities, and flourishing, well-
connected businesses. They are also engines of economic growth. However, as
urban populations increase, many cities are becoming full and congested, and this is
inhibiting economic development and reducing quality of life.
11
The UK has a programme of major strategic transport projects in the pipeline,

including a large programme to improve major roads, HS2 and Northern
Powerhouse Rail. In planning for the next wave of major investment, attention must
be turned to cities. The UK is unusual in that many of its large cities outside of the
capital are less productive than the national average. Transport alone cannot drive
growth, but the UK should make sure that urban transport enables it.
For all their benefits, neither electric nor connected and autonomous vehicles will
solve the problems of urban transport; rather they are likely to increase the number
of drivers on the roads. Government and cities need to act now to ensure that space
in cities is used effectively, with room allocated for fast, frequent public transport
systems, well-connected and affordable housing, and pleasant public spaces. This
will require a new approach to governance, strategy and funding.
To deliver thriving cities, metro mayors and other city leaders should develop
integrated strategies for transport, employment and housing. Housing and
infrastructure should be planned together: new housing requires new infrastructure.
These integrated strategies should be backed up by stable, substantial, devolved
funding. And for the cities that face the most severe capacity constraints, and
with the most potential for growth, there should be additional funding to support
major upgrade programmes, which would be agreed between the cities and
central government.
Development of regional cities should be in addition to, rather than instead of,
continuing to invest in London, whose growth brings benefits across the UK. The
Commission will continue to work with government and cities to develop the next
wave of infrastructure upgrades across the country.
Reducing the risks of drought and flooding

Climate change will continue to make extreme weather events such as floods and
drought more likely in future years, and cities, towns and villages must be resilient.
Decisive policy action is needed to mitigate these risks.
About 5 million properties in the UK are currently at risk of flooding. Protection
from floods in the UK over the past years has too often been reactive rather than
proactive. Ideally, no one should be exposed to flooding. Flooding has severe
impacts on quality of life, particularly mental health.
A long term strategy for flood protection would allow a nationwide standard of
resilience to flooding, with catchment based plans. These plans should evaluate
the full range of options including traditional flood defences, ‘green infrastructure’
(whether natural flood management or sustainable drainage systems), individual
property measures and spatial planning. In the Commission’s social research, 59
per cent of people agreed that everyone should have the same standard of flood
resilience, even though some properties cost more to protect.
The Commission believe that a national standard should be set for resilience to
flooding with an annual likelihood of 0.5 per cent by 2050, where feasible. Over
12
longer time periods, higher standards might be achievable. Densely populated

areas, where the consequences of flooding are potentially much more serious,
should be resilient to flooding with a likelihood of only 0.1 per cent a year by 2050.
The Environment Agency should update plans for all catchments and coastal cells in
England before the end of 2023.
A reliable water supply is usually taken for granted in UK. But despite its reputation
for rain, the country faces a real and growing risk of water shortages, especially
in the south east of England. Action is needed to address these challenges, but
conflicting incentives, limited cooperation between water companies and a short
term focus mean that insufficient progress has been made. In the event of a serious
drought, the nation faces an unacceptably high risk of severe supply limitations;
homes and businesses could even be completely cut off.
The Commission has published a standalone report, Preparing for a drier future:
England’s water infrastructure needs, which sets out a twin-track approach to
manage water supply and demand. The government, working with Ofwat and water
companies, needs to ensure the capacity of the water supply system in England is
increased to boost the country’s resilience to drought whilst also managing demand
and reducing leakage. This can be achieved through: delivering a national water
transfer network and additional water supply (for example reservoirs or water re use)
by the 2030s; and halving leakage by 2050, together with greater smart metering.
Choosing and designing infrastructure

For government and relevant industries to take decisive action on their
infrastructure projects, they need to have confidence that their decision making is
as good as possible. Long term decisions inevitably carry risk, but these risks need
to be taken, and uncertainty managed as much as possible. Decision making can be
improved through robust analysis of the performance of existing infrastructure and
recognising the value of good design in infrastructure.
Not everything can be reduced to numbers, but there should be an effective
methodology to measure the quality of the UK’s current infrastructure to reliably
inform assessments of future needs. The assessment of the potential value of new
projects could be more effective if there were better data on how past projects have
performed. All government departments and agencies should therefore collect
and publish costs and benefits estimates and outturns for major infrastructure
projects. This would lead to increased scrutiny of costs and benefits estimates,
improving quality.
Good design can save money, reduce risks, add value, deliver more projects on time
and create infrastructure that looks good and works well for everyone. All nationally
significant infrastructure projects should have a board level design champion,
and use a design panel to maximise the value provided by the infrastructure. The
Commission, advised by a national infrastructure design group, will publish a set of
design principles to inform this.
13
Funding and financing

While the Commission’s recommendations comprise an ambitious programme of
investment, this is not an unaffordable wish list. A crucial factor in the development
of this Assessment has been the fiscal remit set by government. This provides a long
term funding guideline for public investment in infrastructure of 1.0 to 1.2 per cent of
GDP, including existing government funding commitments such as HS2.
Where infrastructure is funded by the private sector, and the costs of any
recommendations will ultimately be met directly by consumers, the Commission
has also provided a transparent assessment of the overall impact on bills. Where
recommendations have net costs, the Commission believes that these are
manageable and good value relative to the benefits the infrastructure provides.
The recommendations in this Assessment, and the implications for public
expenditure and for bills, reflect the judgement of the Commission. In reaching its
conclusions, the Commission has drawn on a wide range of evidence. Uncertainty is
inevitable given the timescales for infrastructure investment, and so the Commission
has also sought to understand how robust its decisions are to uncertainty, seeking
solutions that will stand the test of time.
The recommendations are an affordable and deliverable strategy to modernise and
strengthen the UK’s infrastructure networks. Nevertheless, it is important that these
recommendations are paid for at least cost. Part of this comes from improvements in
design and delivery. Part comes from ensuring that infrastructure is financed in the
best way possible.
These recommendations will require a combination of public and private financing.
Financing itself is not in short supply. However, state financing institutions can help
to encourage private investment and catalyse activity in new markets. The European
Investment Bank does some of this, but there is a risk that access may be lost
following the UK’s exit from the EU. A UK infrastructure finance institution, focussed
on specific objectives, should be established if access to the European Investment
Bank ceases after the UK exits the EU.
There is also a need for a better understanding of the costs and benefits of
private financing and traditional procurement in the delivery of publicly funded
infrastructure. The Commission has developed an analytical framework to be used
in the evaluation of the costs and benefits of financing options for new and existing
projects, which will enable greater certainty about the costs and benefits of the use
of private financing for public sector projects.
Over the Assessment’s timeframe, changes to the way road users pay to use roads
are inevitable. In particular, fuel duty revenues will continue to decline with the
impending shift to electric vehicles. This presents a huge opportunity to design a
system that improves on current road taxation by being fairer, more sustainable,
more effective at reducing the negative impacts of driving, and attracting greater
public support. For years, experts have proposed road pricing, only for it to be
opposed by the public. The Commission intends to engage stakeholders and the
14
public on this topic to identify a new approach that works for the future of transport.
Reforming how road use is paid for has been discussed for decades, but the issue is
becoming more and more pressing and cannot be avoided forever.
Local funding mechanisms can help to ensure that local infrastructure is funded in
a way that is fair, efficient and sufficient to meet local needs. The current system for
gathering contributions from developers is complex, but raises more revenue than
previous attempts. But the system could be improved still further. More funding
mechanisms should also be made available to Local Authorities to enable them to
capture a greater share of the uplift in land value that can occur with infrastructure
investment. This should include making it easier to raise business rate supplements
for up to one third of scheme costs, and giving local authorities powers to levy
zonal precepts on council tax where public investments in infrastructure drive up
surrounding property values.
Next steps
The Commission has outlined an ambitious set of recommendations. As the first
Assessment, it could never solve everything. The Commission has therefore
focused on key priorities to equip the UK with the infrastructure it needs. These
recommendations will enable the UK to have a thriving digital economy, a low cost,
low carbon energy and waste network, clean air, successful cities, and resilience
to extreme weather. But the Commission cannot achieve this alone. Government,
regulators, industry, citizens and others will all need to contribute to making
this vision a reality. Over the coming months, the Commission will work to build
consensus around its recommendations.
Infrastructure delivery depends on the availability of the right skills, the approach
to construction and project management, the depth of the supply base, and the
capability of government and other infrastructure owners and operators to act as
an intelligent client. These are the responsibility of the Infrastructure and Projects
Authority which advises on infrastructure delivery. The UK’s exit from the EU will
impact the UK’s skills base and supply chain. There should be a strategic approach to
manage this.
As its initial next step, the government has committed to lay the Assessment
before Parliament, and to respond to the Assessment within six months (with a final
deadline of a year). Its response will set out which recommendations it has agreed
to, any further work required to take forward the recommendations, and alternative
proposals for any recommendations it has not agreed.
The Commission will monitor progress in delivering government endorsed
recommendations, and will report on this in its Annual Monitoring Reports.
The second Assessment, expected around 2023, will build on the recommendations
in this report, as well as covering new ground.
15
Northern Ireland, Scotland and Wales

The Commission’s remit covers six infrastructure sectors. As summarised in the table below, in
four of six sectors covered by the Commission, there is substantial devolution to the devolved
governments. Only energy in Great Britain and digital communications in the UK do not entail
significant devolution.
The Commission’s role is to advise the UK government. But the Commission works with both the
UK government and the devolved administrations where responsibilities interact.
Sector covered by the Devolved administration responsibility

Commission
Scotland Northern Ireland Wales
Transport Largely devolved Devolved responsibility Devolved, aside from rail

Energy Not devolved, aside from Devolved, aside from Not devolved aside from
energy efficiency nuclear energy efficiency
Water and sewerage Devolved responsibility Devolved responsibility Devolved responsibility
Flood risk Devolved responsibility Devolved responsibility Devolved responsibility
Digital Not devolved Not devolved Not devolved
Waste Devolved responsibility Devolved responsibility Devolved responsibility
Table 1: Devolved administration responsibilities, by infrastructure sector
16
1. BUILDING A DIGITAL
SOCIETY
17
National
National Infrastructure Commission | National Infrastructure Infrastructure Commission report | National Infrastructure Assessment
Assessment
A FULL FIBRE FUTURE

Digital services are increasingly important for growth,
infrastructure, and quality of life.
The superfast broadband programme is coming to an end and full fibre is the next step
Faster:
offering as much as 1,000 mbps Upload speeds (mbps) Download speeds (mbps)
20
Copper today 80
50
Upgraded copper 330
20
Cable 350
1000
Full fibre
1000
More reliable: Cheaper to run:

fibre has 5 times fewer faults Fibre would save up to £5bn in
than copper connections operating costs over 30 years
The benefits will take time, as full

fibre speeds are not yet needed,
but delivery will take 10-20 years
Investment must
start now
to avoid being left behind
18
X
National Infrastructure
National Commission
Infrastructure report | National Infrastructure Assessment
Commission
Competition is the best way to get full

fibre and the market is already starting
to deliver - companies are planning to
make full fibre available to up to 14
million premises by 2025
But government support will

be needed in rural areas
THE COMMISSION RECOMMENDS:
A government strategy to deliver nationwide

full fibre by 2033
Ofcom should promote

network competition to Government support
drive the commercial in rural areas starting
roll-out of full fibre by 2020
Measures aimed at
Allow for copper
cutting the costs of
switch off by 2025
delivery
Sources: DCMS, Ofcom, Prism and Tactis, Frontier Economics
19
X
Digital connectivity is now an essential utility, as central

to the UK’s society and economy as electricity or water
supply. Demand for data, and therefore the speed,
reliability and capacity of broadband connections, is
growing rapidly. Demand is likely to continue to increase
as businesses, homes and infrastructure become smarter.
So it is important that quality broadband is available
throughout the country. Full fibre can provide this for
the future.
The UK already has a strong digital economy underpinned by an extensive
superfast broadband network.1 There is room for improvement on mobile
coverage and rural connectivity but, in general, the UK’s digital connectivity
meets the needs of today’s consumers.2 The UK compares well internationally
for superfast broadband availability, but trails behind other countries such as
Spain and Sweden for full fibre availability.3
The UK must now prepare for the future. The superfast broadband programme
is coming to an end, with 98 per cent of UK premises on track to receive
superfast broadband.4 A guaranteed minimum broadband service will be
available to remaining premises by 2020 but provides only a basic service for
today’s needs.5
The Commission’s judgement is that a national full fibre rollout programme
should be put in place. This will provide fast, reliable broadband, improve
connectivity in rural areas, and support 4G and 5G mobile coverage. However,
it will take at least a decade to build.6
The successful delivery of full fibre will require:
ll a nationwide plan to deliver full fibre to all businesses and homes by
2033, with approaches tailored to the needs of different areas
ll making the most of fibre deployment to support improved mobile
coverage
ll allowing for copper switch-off
ll tackling the barriers that delay deployment and increase costs.
The Commission has previously examined the infrastructure needed to
support 5G mobile in its report Connected Future7 and the Assessment does
not re‑examine this. The Commission is also carrying out a review of economic
regulation, which will report in spring 2019.
20
Full fibre for the future

The UK faces a choice between continuing to upgrade the existing copper
network, or replacing what is left of it with fibre optics. Full fibre, a connection
without any copper, is the best available broadband technology on the
horizon. It can provide consistent, gigabit speeds, which are less affected by
rain and flooding, uses less energy, costs less to maintain and has no long term
foreseeable capacity constraints.8,9,10,11 Nationwide full fibre would also provide the
foundation for 5G mobile connectivity and could improve 4G coverage in harder
to reach places.12
Choosing to make this investment is not a risk-free decision. In countries with
widespread full fibre, take-up of higher bandwidth services is often low.13 Analysis
produced for the Commission estimates that, over a 30 year period, building
and maintaining a full fibre network would cost £33.4 billion.14 This is estimated
to be approximately £11.5 billion more than incrementally upgrading the existing
infrastructure.15 But a further incremental upgrade now may still require full fibre
in the long term. Figure 1.1 shows the breakdown of costs.
35 33.4
30
25
21.9
20.1
20
£ billion
15
12.0
9.4
10
6.4 6.9
5
0.5
0
Capital costs Connection costs Operating costs on 30-year whole
a 30-year basis life costs
Full fibre Incremental upgrade

Note: present value in 2020
Figure 1.1: Estimated costs of deploying full fibre versus upgrading the existing
copper/cable infrastructure16
The two alternatives to fibre are G.fast (a copper based technology), and cable
(which uses shielding to reduce the electromagnetic interference that affects
copper). G.fast might be an appropriate interim solution in some areas, but it is
ultimately subject to many of the same limitations as copper. Unlike fibre, speeds
on copper lines drop significantly over longer distances.17 Existing cable networks
can be upgraded to compete more effectively with fibre over the long term.18
But Virgin Media, the UK’s main cable provider, is increasingly rolling out fibre as
it expands its network into new areas, partly because deploying and maintaining
21
new cable is more expensive than full fibre.19 Full fibre also has the potential to
deliver much higher upload and download speeds.20
Total data demand, based on the time spent on the internet, has risen drastically
over the last few years.21 This is because people are online for more of the day and
because the amount of data used at any one time is increasing, requiring higher
bandwidth. Figure 1.2 compares projections of bandwidth demand, produced
for the Commission and for Ofcom, the regulator, and the level at which a
copper network becomes insufficient to meet demand. It is not clear when, or if,
bandwidth demand will outstrip the capacity of the existing copper network. But
it is possible that bandwidth demand could exceed the capabilities of a copper
network within the 10-20 year horizon required to roll out a full fibre network.
800
700
600
500
Bandwidth (Mbps)
400
Copper not sufficient
300
Copper sufficient
200
100
0
2000 2005 2010 2015 2020 2025 2030 2035 2040
Future benefits of broadband Benefits of ultrafast broadband
networks (Frontier, 2017) deployment (WIK, 2018)
Note: the dotted line is the theoretical maximum ‘up to speed’ on a copper upgrade.
Figure 1.2: Historic average UK broadband bandwidth and forecasted future

bandwidth demand22
However, despite the possibility that demand does not materialise, the
Commission’s judgement is that investment in full fibre is a risk worth taking.
Past investments in digital infrastructure have supported significant economic
growth. The rollout of broadband infrastructure in OECD countries from 1997 to
2007 increased annual per capita growth by 0.9 to 1.5 percentage points for a 10
percentage point increase in broadband penetration.23
22
Potential drivers of future bandwidth demand

Demand increases to meet supply: History shows that as consumers’ bandwidth increases,
sites and applications adapt to make use of faster speeds. Video is the main driver of bandwidth
demand. When BBC iPlayer launched in 2007 it required 0.5 megabits per second (Mbps) to watch
programmes on demand.24 Today, the minimum is the same, but iPlayer now offers a range of
more sophisticated services that require much faster speeds, including 20 Mbps for Ultra HD
programmes such as Blue Planet, and 36 Mbps for live events such as the World Cup.25
Virtual reality: If the use of virtual (and/or augmented) reality increases for entertainment,
simulations, or communication, this will require better, faster broadband connections.26
Internet of things: Innovations in the network of infrastructure and appliances with digital
connections will continue to increase the amount of data being transferred regularly through
both the broadband and mobile networks.27
Connected and autonomous vehicles: Connected vehicles are expected to transmit large
amounts of data at high speeds to other connected vehicles and/or road infrastructure. This is
likely to require reliable 5G connectivity on roads, which will need to be underpinned by fibre.28
Furthermore, a full fibre network still provides several benefits relative to a

copper network upgrade. These include operational savings, which would start
being realised straight away and could amount to £5.1 billion between 2020 and
2050 (see figure 1.1). Full fibre suffers five times fewer faults than copper-based
networks.29 While not large enough to justify the investment in itself, these
savings will continue beyond this timeframe.
A long term strategy for nationwide full fibre

Network operators are beginning to build new full fibre networks across the UK.
However, only 4 per cent of UK premises have access to full fibre.30
Delivering a new national full fibre infrastructure network will take at least a
decade.31 Other estimates suggest the programme could be closer to 20 years.32 If
the UK wants to avoid the risk of not having the infrastructure needed to support
an increasing demand for data in the future, it will need to start investing soon,
even if this is ahead of demand at present.
Transitioning to full fibre from copper is a substantial infrastructure upgrade, and
it will be difficult for the market to deliver in the absence of a clear government
strategy. Commercial investors will need clarity on government’s decision to back
full fibre to give them the confidence to invest.
Government must therefore define and deliver the country’s full fibre broadband
strategy. It should be responsible for the plan, and ensure that Ofcom has the
necessary powers to implement and deliver it.
23
A nationwide strategy
Recent announcements by network operators already total 14 million premises
expected to receive a full fibre connection by 2025,33 but in reality this number
will be lower as the networks will overlap. Therefore, while some areas will receive
multiple full fibre networks on a commercial basis, many homes and businesses,
particularly in rural areas, will not receive full fibre at all. The government has set a
target date of 2033 for national coverage, but should now set out a clear strategy
to achieve this, giving commercial investors the confidence they need.
A nationwide broadband plan must reflect the differing economics of delivering
full fibre in different areas of the country. Government should promote
competition in areas where it is commercially viable for multiple network
operators to build and operate full fibre networks. However, some geographic
areas are not commercially viable at all, and in others there is only likely to be
a commercial case for one network (for example smaller towns and villages).
A key part of government’s plan must be to ensure that the places that would not
otherwise receive full fibre get the connectivity they need.
Incentivising competition
Competing fibre networks should be encouraged wherever they are feasible.
Without infrastructure competition, the existing provider has poor incentives to
build new fibre networks, as this undermines its existing copper based services.
New entrants do not have existing customers to lose, so they have greater
incentives to build. Competition will force the incumbent to build new networks
commercially and at a competitive price.34
Infrastructure competition has been shown to drive investment in both new
and existing broadband networks.35,36 It has been a key driver of widespread
fibre rollout in South Korea and Japan, which have over 95 per cent full fibre
availability.37 There is a strong correlation between cable coverage and full fibre
availability internationally.38
The UK should therefore stick to a competitive model for commercial investors
to deliver full fibre. This will require significant financing and it is essential that
investors have confidence that if their business plans are successful, they will
be able to make a fair return without the government reneging after the fact.
The market must have the freedom to set the price for new services, subject,
as now, to regulation of the basic service level. Within a competitive model
consumers will have a choice of whether to pay any premium for full fibre. The
market will drive full fibre deployment, and government should not intervene
by restricting overbuild of new or existing networks, unless it constitutes
anticompetitive behaviour.
This requires:
ll a clear commitment from government and Ofcom to promote a
competitive market wherever possible, with a stable regulatory regime
24
ll a commitment to deregulate in geographic areas where competition is

effective
ll a commitment to ensuring telecoms providers can make a ‘fair bet’ for
the risks they are taking in building new infrastructure, recognising the
long term benefits of the infrastructure
ll Ofcom continuing to ensure all providers can access Openreach’s
ducts and poles on a fair and efficient basis.39
Reaching rural and remote areas

The Commission has concluded that nowhere should miss out on the benefits
of full fibre. The Commission’s social research found that 86 per cent of people
agreed that all parts of the UK should have equal access to broadband.40 In the
past, the UK had the ambition and foresight to connect the whole country to
electricity, water and transport networks. The benefits today are obvious. The
same ambition is needed now for digital infrastructure.
The capacity constraint of the existing copper network is a particularly critical
issue for rural areas with long copper lines. The performance of copper is severely
affected by distance, and cannot be upgraded without replacing large parts with
fibre, effectively rendering full fibre as the only viable infrastructure upgrade
option for most rural areas.41 In the most remote areas, alternative technologies
such as the use of mobile connectivity, fixed wireless or satellite might be more
cost effective. Full fibre could also help to improve mobile coverage in hard to
reach areas. Mobile ‘cells’, which transmit and receive data to and from mobile
devices, connect to fixed fibre through which they are linked to the global
internet.
Without full fibre, rural areas and some deprived communities where full fibre may
not be commercially viable will risk falling behind. But everyone stands to gain
from ubiquitous connectivity if it enables public services to use digital technology
to become more efficient. For example, some health services are already moving
online, which can provide better access to specialist services, reduce the need
for patients to sit in waiting rooms where they risk further infection, and reduce
costs for the NHS.42 Savings from online provision in rural areas are likely to be
particularly large, where the costs of providing traditional services are higher in
sparsely populated areas.
The Commission recommends a taxpayer-subsidised infrastructure delivery
scheme to uncommercial areas, along the lines of the successful Broadband
Delivery UK programme, which directly subsidised up to 50 per cent of the capital
expenditure for installing superfast broadband in rural areas. A taxpayer subsidy
can take advantage of competitive dynamics, with different companies bidding
for tenders. In the short term, this can have positive implications for how quickly
and cheaply the infrastructure is deployed. In the longer term, it also enables
the costs and performance of subsidised delivery in one region to be measured
against others.
25
Unlike the ‘Broadband Delivery UK’ programme, government should focus initially
on the areas least likely to receive full fibre broadband commercially, and which
are also most likely to experience unreliable broadband through long distances of
copper cables. Communities within these areas should be eligible to get their full
fibre sooner if they volunteer to help build their network at community level, as
for example Broadband for the Rural North have done.43
However, a reasonable cost threshold will be necessary: the most expensive
premises can cost above £45,000.44 This threshold should be high enough for
the programme to cover the vast majority of premises. The few premises which
are above the cost threshold should be able to use the subsidy to fund their own
solution. The guaranteed minimum broadband service will act as a safety net.45
Completing a nationwide rollout

In some areas of the country, only one fibre operator is commercially viable. It is
uncertain whether fibre operators will rush to invest with the aim of becoming
the monopoly provider or choose to avoid areas that cannot support multiple
networks. In these areas, there is a choice between a targeted solution or relying
on the combination of competition and eventual direct government support
where the private sector doesn’t deliver.
A targeted solution might meet the particular challenge, but would require the
government to identify and define the boundaries of these areas upfront. This
would rely upon uncertain and evolving assumptions. Changes in the cost of
deployment and consumer demand could extend the area where competition
is commercially viable, rendering any targeted solution out of date and
potentially costly.
Given the pace of innovation in the industry, the potential for significant changes
in consumer demand, and the long timescales over which any targeted solution
would have to operate, the Commission believes that the boundaries should be
allowed to reveal themselves over time. Providing government support for the
hardest to reach areas first will allow the market to drive investment in the first
instance. The part-subsidy scheme can then be extended in phases to areas that
remain unserved, meeting market driven rollout ‘in the middle’. If this results
in support for provision in areas that are commercially viable, but for only one
provider, the taxpayer contribution can be reinvested or refunded through
clawback mechanisms.
Improving mobile connectivity

The Commission was asked in March 2016 to advise government on the steps
the UK should take to become a world leader in the deployment of 5G mobile
networks, and take early advantage of the applications 5G could enable. The
Commission published its report, Connected Future, in December 2016.
The Commission’s central finding was that mobile connectivity has become
a necessity. It recommended that government ensures services are available
26
wherever people live, work and travel, and that the UK’s roads, railways and city
centres are ready for 5G.
The government and Ofcom have made some progress; the Department for
Digital, Culture, Media and Sport has bolstered its telecoms capabilities and
Ofcom has improved its coverage metrics to reflect actual user experience.
Ofcom is also currently consulting on new coverage obligations, tied to the
700 MHz spectrum auction, to improve geographic coverage, particularly in rural
areas.46 However, government has made particularly poor progress on road and
rail connectivity. It must accelerate its work to ensure 5G-ready infrastructure is
available across the UK’s motorways and major rail lines by 2025 at the latest.
The Assessment does not reopen the Commission’s earlier mobile
recommendations. The focus of the Assessment has been on fibre deployment
for both fixed and mobile connectivity. Fibre is the necessary underpinning
infrastructure for mobile connectivity. Full fibre policies have the potential to
improve 4G coverage in hard to reach towns, villages and hamlets. It could also
help deliver 5G further, more quickly and cheaply.
Mobile coverage is particularly poor in rural areas; 15 per cent of rural geographic
areas cannot receive 4G coverage by any operator, compared to less than 1 per
cent of urban areas. The Church of England recently agreed to using its church
spires to improve mobile coverage. Two thirds of Anglican churches are in rural
areas, situated in the heart of villages with tall spires, ideal for mobile cells. A full
fibre connection to the highest point in a local village, whether or not that is the
church, could allow mobile cells to be easily installed, improving connectivity in
that local area.
Looking ahead, there is an option to preempt where 5G cells might need
fibre. Subsidised full fibre rollout could include these locations. This includes
lampposts and public buildings. Lampposts could be ideal sites for 5G cells, as
well as WiFi and 4G cells today. They have access to power, are high up and
evenly spaced out. But they do not automatically have fibre and will not receive it
without coordination.
5G is a certain part of the future but what the 5G network will look like is
uncertain. It is therefore a gamble to modify full fibre deployment based on
any current 5G assumptions. Further evidence is needed to decide whether 5G
obligations should be included with full fibre subsidies. The onus should be on
wireless infrastructure operators to supply evidence and recommendations to
the government.
Allowing for copper switch-off

Copper switch-off should be a key part of the long term national full fibre plan.
Running a copper network adjacent to a fibre network will add significantly
to overall costs. Switching off the copper network is ultimately a commercial
decision for Openreach, the existing operator, but does require some
government intervention to allow them to make the decision.
27
The transition plan will need to include protection for potentially vulnerable
consumers. Some consumers will not want fibre but will receive it anyway.
Openreach should not be able to charge customers extra that had no need for
the upgrade.
Removing policy barriers

Tackling the barriers that delay deployment and increase costs must be an
integral part of the UK’s national full fibre broadband plan. Government has set up
a Barriers Busting Task Force. This is a good first step and should continue to be
prioritised. The Commission has identified four key objectives.
Give digital infrastructure operators the same rights as utilities: The process for
obtaining rights of way on private land, known as ‘wayleaves’, should be simplified
and standardised, through a notification regime similar to those used for other
utilities. All new developments should have full fibre and telecoms duct capacity
from the outset, as for other utilities such as electricity and water.
Prioritise digital connectivity at a local level: As recommended in Connected
Future, local government should designate an individual ‘digital champion’
with responsibility for engaging with telecoms providers. The digital champion
in each local planning authority should be responsible for coordinating and
facilitating digital infrastructure deployment in their area, acting as the single
point of contact for all telecoms providers, and assisting them in delivering better
connectivity for the local area. Digital champions should prioritise:
ll reforming and streamlining the process around permissions for street
works, reducing the variability across the country and removing
inefficient delays
ll improving the accessibility of their publicly owned assets, making it
easier and cheaper for operators to deploy digital infrastructure in the
local area.
Increase infrastructure sharing to push full fibre rollout further: Access to
Openreach’s ducts and poles allows alternative operators to deploy fibre more
quickly and cheaply. They no longer need to dig their own trenches, which can
make up to 60 per cent of total deployment costs.47 This increases the areas of the
country where full fibre can be rolled out commercially. The success of this policy
should be monitored by levels of usage to ensure that Openreach’s infrastructure
is accessible in practice. There may not be benefits from duplicating in-building
fibre connections, which are costly and disruptive to install. Countries such as
Spain, Portugal and France mandate that in-building fibre is accessible to all
operators.48 Ofcom should consider whether such policies should be applied in
the UK.
Making use of other existing infrastructure can also reduce deployment costs.
For example, using aerial fibre along existing electricity poles may push some
28
premises below a reasonable cost threshold in rural areas. Infrastructure re-use

should therefore be explored before premises are ruled out for being too costly.
Ensuring planning is fit for 5G deployment. The next generation of mobile will
require a large number of small cells raising planning issues such as access to
street furniture (eg lampposts). This will require collaboration between network
operators and local authorities to ensure planning and other permissions
are handled swiftly and in a coordinated way. The UK will not get the mobile
infrastructure it needs if each individual cell requires separate planning
permission. Planning policy, legislation for code powers, and guidelines
for deployment at street level will need to be addressed before dense site
deployment can take place. The Commission made recommendations on 5G in
Connected Future.49
The Commission recommends that government should set out a nationwide
full fibre connectivity plan by spring 2019, including proposals for connecting
rural and remote communities. This should ensure that full fibre connectivity
is available to 15 million homes and businesses by 2025, 25 million by 2030 with
full coverage by 2033. To achieve these targets:
ll Ofcom should promote network competition to drive the
commercial rollout of full fibre, by deregulating where competition
is effective and guaranteeing a fair bet on risky investments before
regulating any uncompetitive areas.
ll Government should part subsidise rollout to rural and remote
communities, beginning by 2020, starting with the hardest to reach
areas and community self-build.
ll Government and Ofcom should allow for copper switch-off by 2025.
ll Government and Ofcom should take action to cut the cost of full
fibre deployment including:
–– Government should ensure the processes for obtaining
wayleaves and connecting new builds are the same for
digital infrastructure as other utilities by 2019.
–– Local government should designate ‘digital champions’
to improve telecoms processes such as street work
permissions and access to publicly owned assets.
–– Ofcom should monitor the accessibility of Openreach’s duct
and pole infrastructure by levels of usage.
29
Endnotes
1
Department for Digital, Culture, Media and Sport (2017), UK Digital Strategy 2017
2
Ofcom (2017), Connected Nations 2017
3
Ofcom (2017), International Communications Market Report 2017
4
Department for Digital, Culture, Media and Sport (2016), The Great British Broadband Boost
5
Department for Digital, Culture, Media and Sport (2018), A new broadband Universal Service Obligation: Government’s
response to consultation on design
6
Prism and Tactis (2017), Cost analysis of future digital infrastructure
7
National Infrastructure Commission (2016), Connected Future
8
Ofcom (2018), Building a full-fibre future
9
Vodafone (2015), Vodafone’s call for the Gigabit Society
10
11
Frontier Economics (2017), Future benefits of broadband networks
12
The Institution of Engineering and Technology (2017), 5G Networks for Policy Makers
13
Liberty Global Policy Series, Communications Chambers (2016), Connectivity for the Gigabit Society: A framework for
meeting fixed connectivity needs in Europe
14
Prism and Tactis (2017), Cost analysis of future digital infrastructure, present value in 2020 (2020 prices)
15
16
17
Ofcom (2017), Connected Nations 2017: Data analysis
18
19
National Infrastructure Commission (2017), Congestion, Capacity, Carbon: Priorities for national infrastructure consultation
response
20
Ofcom (2017), Connected Nations 2017
21
Ofcom (2017), Communications Market Report 2017
22
Study 1: WIK (2018), The Benefits of Ultrafast Broadband Deployment; Study 2: Frontier Economics (2017), Future benefits of
broadband networks; Historical average: Ofcom (2004-2018), Connected Nations and infrastructure reports. Accessed at:
https://www.ofcom.org.uk/research-and-data/multi-sector-research/infrastructure-research
23
Czernich et al (2011), Broadband Infrastructure and Economic Growth, Economic Journal, 121(552).
24
BBC (2009), BT accused of iPlayer throttling. Accessed at: http://news.bbc.co.uk/1/hi/technology/8077839.stm
25
BBC (2018), Research & Development Blog: World Cup 2018 in UHD HDR on BBC iPlayer. Accessed at:
https://www.bbc.co.uk/rd/blog/2018-05-uhd_hdr_world_cup_2018
26
Frontier Economics (2017), Future benefits of broadband networks
27
Frontier Economics (2017), Future benefits of broadband networks; Real Wireless (2016), Future Use Cases for Mobile
Telecoms in the UK
28
Real Wireless (2016), Future Use Cases for Mobile Telecoms in the UK
29
Ofcom (2018), Wholesale Local Access Market Review, Volume 1
30
Ofcom (2018), Connected Nations Update Spring 2018
31
32
National Infrastructure Commission (2017), Congestion, Capacity, Carbon: Priorities for national infrastructure,
BT consultation response
33
34
Ofcom (2016), Strategic Review of Digital Communications: initial conclusions
35
Ofcom (2016), Strategic Review of Digital Communications: initial conclusions
36
Bruegel Policy Contribution, Briglauger, W., Cambini, C., Grajek, M., (2015), Why is Europe Lagging on Next Generation
Access Networks? Issue 2015/14, September 2015.
37
Ofcom (2017), The International Communications Market Report
38
Ofcom (2015), Strategic Review of Digital Communications: discussion document
39
40
Ipsos MORI (2018), National Infrastructure Commission phase 2: public research
41
42
NHS (2018), Empower the Person: roadmap for digital health and care services. Accessed at: https://indd.adobe.com/view/
f1caab26-4963-464e-ba33-6ff71d991a9a
43
B4RN (2017), The World’s Fastest Rural Broadband. Accessed at: https://b4rn.org.uk/
44
Department for Digital, Culture, Media and Sport (2018), A new broadband Universal Service Obligation: Government’s
response to consultation on design
45
Ofcom (2018), Implementing the Broadband Universal Service Obligation
46
Ofcom (2018), Consultation: Improving mobile coverage – Proposals for coverage obligations in the award of the 700 MHz
spectrum band
47
48
WIK-Consult (2017), Best practice for passive infrastructure access
49
National Infrastructure Commission (2016) Connected Future
30
2. LOW COST,
LOW CARBON
31
LOW CARBON INFRASTRUCTURE

AT NO EXTRA COST
Reducing emissions has often appeared costly and difficult, but this
is no longer the case, if the right decisions are taken now
Today, consumers The same services could be
pay an average of delivered at the same cost in
£1,850
2050 by a low carbon energy
system
per year for electricity,

heating, hot water and
petrol or diesel
The Commission estimates that an electricity system

powered mainly by renewables would cost no more
than relying on new nuclear power plants
Renewables need more flexibility to balance variations

in weather, but are cheaper to build
Sources of flexibility are Burning natural gas for heating and

getting cheaper: battery hot water is not a long-term option:
prices have fallen
22%
80%
since 2010
of UK’s greenhouse
gas emissions come
from heating
At least 50% No more than 1 Pilots to test Buildings which

renewable more contract hydrogen and require less
electricity for new nuclear heat pumps as energy to heat
generation by before 2025 low carbon
2030 heating options
Sources: BEIS, DfT, ESC, ONS, Commission calculations, Aurora Energy Research, McKinsey, Element Energy and E4tech
32
INCINERATING LESS, RECYCLING MORE

England needs to do as well as Wales – a world leader – at recycling
PEOPLE ARE WILLING TO DO THEIR BIT:
50%
would pay £30 a year
for more recyclable
packaging
79% of people would be
willing to separate
their food waste
BUT THEY FIND THE CURRENT SYSTEM TOO COMPLICATED

Higher recycling, especially of plastics, could:
Save £6.2 billion from Avoid the need to build Reduce greenhouse
2020 to 2050 20 additional incinerators gas emissions
Recycling targets: Clearer labelling: Restricting use of Separate food

65% of all waste, recyclable or not hard to recycle waste collection,
75% of plastic recyclable plastics, by 2025 by 2025
packaging, by
2030
Sources: Anthesis, Ipsos MORI
33
The UK can have low cost, low carbon electricity, heat

and waste. Ten years ago, it seemed almost impossible
for the UK to transition to being powered mainly by
renewable energy sources such as solar and wind
power in an affordable and secure way. Now the same
focus needs to be applied to deliver a value for money
approach to reducing emissions from heat. Low cost, low
carbon energy and waste systems are now possible, and
should be delivered.
The UK is legally bound to reduce its greenhouse gas emissions by at least 80
per cent from 1990 levels by 2050. Today, around 70 per cent of emissions come
from electricity, buildings, travel and waste.1
Reducing emissions has often appeared costly and difficult, but this is no
longer the case. Today consumers pay an average of £1,850 per year for the
energy they use, including electricity, transport fuel, and fuel and equipment
for heating and hot water.2 The Commission’s analysis shows that the same
services could be delivered at the same cost (in today’s prices) in 2050 by a low
carbon energy system.3 But this will only be possible if the right decisions are
taken now.
The Commission’s modelling has shown that delivering a low carbon electricity
system for 2050 powered mainly by renewables is a low cost option, cost
comparable to building further nuclear power plants after Hinkley Point C.
The Commission’s modelling also shows that continuing to use fossil fuels with
the addition of carbon capture and storage is unlikely to form part of a cost
competitive generation mix.
Reducing the waste sent to energy from waste plants (incinerators) by
recycling more plastic and converting more food waste into biogas can also
help reduce overall emissions. But even with emissions almost eliminated
from power generation and waste, the UK cannot achieve its emissions
targets without transitioning away from using natural gas, a fossil fuel, for
heating. The UK must now address this problem. In the short term, improving
the energy efficiency of the UK’s buildings will reduce demand for heat and
mitigate some of the emissions. In the longer term, it will also reduce the costs
associated with delivering low carbon heat infrastructure.
The successful delivery of a low cost, low carbon energy and waste
system requires:
ll a flexible electricity system and new generation, primarily through
renewables
ll determining the best way to deliver low carbon heat in the UK
34
ll buildings which require less energy to heat

ll encouraging more recycling, and less waste incineration.
A lower cost, low carbon energy system

Reducing carbon dioxide emissions from the power sector no longer needs to be
considered expensive. The Commission’s analysis suggests that, across electricity,
heat and transport, switching to and using low carbon alternatives does not need
to lead to higher costs for consumers in the long term. The need to replace fossil
fuels is driving a shift away from technologies, many over 100 years old, that
society has become locked into, but which are now beginning to be replaced by
more efficient alternatives.
Today, consumers pay an average of £1,850 per year for the energy they use,
including electricity, transport fuel, and fuel and equipment for heating and
hot water.4 The Commission’s analysis shows that the same services could
be delivered at the same cost (in today’s prices) in 2050 by a low carbon
energy system.5
Heating is currently predominantly fuelled by natural gas, a fossil fuel.
Transitioning to a low carbon alternative (the two main options are electrified
heat, using heat pumps; and hydrogen fuelled heat) will add to household bills.
But these extra costs can be outweighed by switching to use electricity rather
than petrol or diesel for transport. The cost of supplying low carbon electricity is
falling.
These estimates are inevitably uncertain. Savings will only be possible if the right
decisions are taken. In particular, these estimates assume investment in cost-
effective energy efficiency measures.
The Commission’s cost estimates:
ll assume a typical household, consuming the same quantities of energy
services today and in 2050
ll include the costs of electric vehicle charging infrastructure and home
heating appliances (boilers, heat pumps) as well as the costs of energy
and fuel
ll exclude potential savings on the cost of cars and car maintenance
from the switch to electric vehicles, and the one-off costs of energy
efficiency measures
ll exclude tax – there would be further savings for households from
today’s tax system (since petrol and diesel are heavily taxed) but these
savings would have to be made up elsewhere by the Exchequer
ll average the projected costs of predominantly hydrogen and
predominantly heat pump scenarios for low carbon heat
35
ll assume continued technology development for existing technologies

(eg battery storage) but do not take into account potential new
technologies.
Full details are set out in the technical annex: Energy and fuel bills today and
in 2050.
Renewables have become cost competitive

It is now possible to conceive of a low cost electricity system that is principally
powered by renewable energy sources. The Commission’s analysis has shown that
the estimated average cost of the electricity system as a whole between 2030 and
2050 is broadly comparable between investing heavily in nuclear power stations
or investing heavily in renewables (there is very little prospect of new nuclear,
beyond Hinkley Point C, coming on system before 2030). Figure 2.1 shows slightly
lower average costs for a scenario with 90 per cent renewable and less than 10
per cent nuclear compared to a scenario with 40 per cent renewable and around
40 per cent nuclear, regardless of whether heat is predominantly electrified using
heat pumps or provided through low carbon hydrogen in the future. The higher
cost of managing the variable nature of many renewables (‘balancing’) is offset by
the lower capital cost, which translates into lower costs in the wholesale market.
60
51 50
Average costs – 2030-2050 – £bn (2016)
50
44
42
40 21.9
20.1
30
12
20
9.4
6.4 6.9
10
0.5
0
High nuclear High renewable High nuclear High renewable
Hydrogen and biomass for heat Heat electrification
Scenario
Wholesale market Balancing Capacity market Network Subsidy
Figure 2.1: Average cost of the electricity system per year for different
proportions of renewables/nuclear and heat decarbonisation pathways6
Estimates over such a long time period, and with considerable technological
change, are inevitably uncertain. Specific figures should not be given undue
weight. However, the broad conclusion of the analysis implies that an electricity
system with no further nuclear plants after Hinkley Point C is likely to be cost
comparable with a system which accommodates a new fleet of nuclear reactors.
36
These estimates assume continued reductions in the costs of renewable

technologies. However, in recent years actual cost reductions have exceeded
expected reductions.7 If the trend were to continue, and reductions were
to exceed those assumed here, then the case for renewables would be
stronger still. Further reductions could arise, for example, from new, cost
effective, technologies for energy storage: the modelling does not assume
untried technologies.
Historical evidence suggests it is much less likely that nuclear costs will fall. Figure
2.2 shows the construction costs of nuclear power stations in various countries,
by construction start date. This shows no discernible trend in construction costs
over time. This is true even for countries, such as France, that have built fleets of
similarly designed reactors. The issue of long term disposal for nuclear waste is
also still unresolved in the UK.
9,000
Construction cost equivalent – £/kWh (£2016)
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1950 1960 1970 1980 1990 2000 2010
Construction start year
Korea US France Japan UK
Figure 2.2: Construction costs of nuclear power stations over time8
37
Paying for nuclear and carbon capture and storage

New nuclear power plants and carbon capture and storage infrastructure will not be built by
the private sector without some form of government support. This can come in a variety of
forms. Expenditure will be treated as either ‘on’ or ‘off’ the public balance sheet (the account
of government’s assets and liabilities) depending on an assessment by the Office for National
Statistics of where the risks and rewards sit.
Off public balance sheet deals, such as the package for Hinkley Point C, leave risks predominantly
with the private sector. The National Audit Office found that this procurement model for Hinkley
Point C did not provide best value for money for consumers.9 It is also questionable whether a
further deal on this basis could be agreed, given the scale of risk that the private sector is required
to hold.
A commonly discussed alternative ‘regulated asset base’ model, as used for the Thames Tideway
Tunnel, could also be classified as off the government balance sheet. In this case, however,
consumers hold both some risks and some elements of financing. The Thames Tideway model
requires consumers to pay for infrastructure in advance. This makes projects appear cheaper
as consumers are effectively financing the projects at zero interest. At least some of the
risk associated with construction costs also sit with consumers, a further hidden cost, since
consumers are not paid to hold these risks in the way investors would be.
Funding nuclear power stations or carbon capture and storage on the public balance sheet
represents a transfer of risk from the private to the public sector. Cost overruns would ultimately
be paid for by taxpayers, at least in part. These risks are not reflected in the government’s cost of
borrowing, since it is taxpayers, rather than the holders of debt, who bear the risk. But this does
not mean the risk, and its associated costs, have been avoided. The apparently lower financing
costs represent a transfer, rather than a reduction, in risk.
On balance sheet options would need to compete with alternative uses of the government’s
balance sheet. Chapter 7 sets out the Commission’s choices within the resources government
have set out (the ‘fiscal remit’). The Commission have not assumed any on balance sheet nuclear
power stations in making these choices.
It is not clear what the best model for either type of project would be, since this would depend
on the commercial terms available and where risk can best be managed. Past experience of on
balance sheet nuclear construction in the UK has been mixed. There is limited experience of
using the regulated asset base model for anything as complex and risky as nuclear. However, any
assessment needs to recognise the full costs and risks. It should not be distorted by hidden costs
or used to present costs as artificially lower.
Given the balance of cost and risk, a renewables based system looks like a safer
bet at present than constructing multiple new nuclear power plants. But a large
amount of uncertainty does remain. No country has yet built an electricity system
with very high levels of variable renewables. It will be important to develop a
better understanding of how such a system performs under adverse weather
conditions, particularly given that climate change itself makes such conditions
38
harder to predict. The risk is that the extra services required to accommodate
large amounts of renewables may be harder, or more expensive, to source than
envisaged. But given that some technologies which provide flexibility are still
fairly immature, the costs could also be lower than the analysis suggests.
Given these uncertainties, the Commission is recommending a ‘one by one’
approach to new nuclear plants, as opposed to the current government policy
to develop a large fleet. This is preferable to a ‘stop start’ approach, in which the
nuclear programme is cancelled only to be restarted at a later date. It will allow
the UK to maintain, but not expand, a skills base and supply chain. This allows
the UK to pursue a high renewables mix, which is most likely to be the preferred
option, without closing off the nuclear alternative.
The Government should also seek to ensure continuity with current Euratom
arrangements as the UK leaves the EU, to ensure that on 29 March 2019 the
UK has the necessary measures in place for the nuclear industry to continue
to operate.
A more flexible power system

Matching energy supply and demand means the electricity system needs
‘flexibility’, both within days and across seasons. This can be provided by a
combination of flexible supply (energy that can be generated on demand);
energy storage; and flexible demand (demand that can be moved to a time of day
when there is more supply).
To date, carbon intensive fossil fuels have met some of this need by providing
plenty of flexible supply. But as they come off the system in favour of (mostly
variable) renewable energy, flexibility will need to be maintained in other ways.
The Commission’s analysis takes into account the cost of providing additional
flexibility, as well as wider system costs such as the transmission and distribution
of electricity. More renewables do lead to more money being spent to match
supply and demand: a system with 90 per cent renewables is estimated to cost up
to £4.5 billion more per year to balance. But cheaper capital costs are estimated
to offset this within the costs for the overall system.10
In all scenarios, extra flexibility, which includes technologies such as storage,
interconnection and demand side response, is a low regrets investment which
reduces estimated total energy system costs by between £1-7 billion per year on
average between 2030 and 2050.11 This finding echoes the conclusions of the
Commission’s Smart Power report.12 Extended periods of low sun and wind in the
winter can be met by a range of flexible technologies or, in the extreme case,
by using limited amounts of fossil fuels. These events are rare, so the impact on
emissions would remain small.13
The Commission’s analysis demonstrates that a rapid uptake of electric vehicles in
the 2020s (see Chapter 3) can not only be accommodated, but that the batteries
in electric vehicles could be a valuable and low cost source of flexibility for the
electricity system in future. Provided smart charging is implemented, electric
39
vehicles can provide demand when it is otherwise low and potentially return
power, stored in car batteries, to the grid at peak times (‘vehicle to grid’).14
A level playing field for different renewables

The existing mechanism for supporting low carbon generation technologies
is called ‘Contracts for Difference’. To reduce generators’ exposure to volatile
wholesale electricity prices, Contracts for Difference require generators to sell
energy to the market as usual, but contract government to pay generators any
difference between the market price and a pre agreed ‘strike price’, which is
usually valid for 15 years. At times of high market prices these payments reverse
and the generator is required to pay government back the difference between
the market price and strike price.15
The Commission favours the use of existing market mechanisms – Contracts for
Difference and the capacity market – where possible, to avoid creating more
uncertainty, but incremental improvements could be made. The Contracts for
Difference mechanism can provide both certainty for generators and a subsidy
(depending on the agreed ‘strike price’). Low carbon generation technologies
have so far not been cost competitive, bringing both of these into play.
Since the introduction of Contracts for Difference, there have been significant
reductions in the costs of renewables to consumers, through the competitive
allocation of support. For each Contracts for Difference auction, technologies
at similar stages of development are grouped together in different ‘pots’. Pot 1
was set up for ‘established’ technologies, including onshore wind and solar, and
pot 2 (for ‘less established’ technologies) contains, amongst other technologies,
offshore wind. Only one pot 1 auction has been run to date.
Revising the distribution of technologies between pots and reinstating a pipeline
of pot 1 auctions would enable the lowest cost renewable generation mix to be
brought forward in the 2020s. Onshore wind, which enjoys strong public support
overall,16 but has been controversial in some communities, would still be subject
to planning restrictions in England. Projects in Wales and Scotland would no
longer be held back. Pot 2 auctions could be used to allocate small amounts of
support to emerging technologies, especially where they are likely to be able to
contribute to the reduction of system costs in future.
Low carbon generation technologies should benefit from the support from
Contracts for Difference. However, as set out in the Commission’s interim
National Infrastructure Assessment, it is also important that generators are
responsible for costs and benefits they impose on the system, such as those
related to where they situate. Some sites impose costs, for example due to the
need for new transmission infrastructure, or benefits, for example if local weather
conditions complement those elsewhere.
Over time, the different costs and benefits of new generation should increasingly
be reflected in the auction process, allowing the lowest cost system to be
developed. However, calculating these impacts is very complex, and in practice
40
a mixture of pricing and other mechanisms will need to be used to ensure total
system costs are reflected in the bid price. As the generation mix evolves, it
will be essential that both technological and spatial diversity are maintained
across the system. This may involve making use of administrative limits for each
technology within auctions.
As the prices of low carbon technologies continue to fall, the need to subsidise
low carbon generation through Contracts for Difference will reduce and,
particularly in later years, the mechanism may require payments from generators.
This could result in contracts that provide the certainty required for low cost
investment, but which are low cost or cost neutral for consumers over their
duration. This may be important, as no one knows what the electricity markets
will look like in the long term, or what factors will drive the electricity price.
However, contract lengths will also need to reflect the need to retain flexibility in
the future development of the electricity market.
Tidal power
The Commission’s analysis suggests that tidal lagoon power will remain an
expensive technology in the future. The extra benefits which arise from its
predictability are not enough to offset its higher capital costs.17 And it will never
be a large-scale solution: an entire fleet of tidal lagoons would only meet up to
10 per cent of current electricity demand in the UK.18 This also limits the scope
for cost reductions through the kinds of learning and scale economies that have
been achieved with wind and solar power. Further details are set out in technical
annex: Tidal power. Given the broad portfolio of readily available lower cost, low
carbon technologies, special treatment for tidal lagoons in the form of bilaterally
agreed contracts is not justified. However, tidal should be allowed to compete on
an equal basis with other technologies for Contracts for Difference.
The near term: 2020 – 2030

Increasing population and electric vehicle uptake means that energy demand
could increase by 9-26 per cent from today to 2030.19 And over this period, up to
40 GW of older power stations will come offline.20 This creates a large opportunity
to continue to reduce emissions from the electricity system throughout the
2020s without stranding assets.
New nuclear power stations are unlikely to be an additional source of electricity
in the 2020s, with the possible exception of Hinkley Point C. Large scale projects
have long construction timelines and often face delays. Smaller reactors are
still at an early stage of development and their benefits remain speculative. It is
estimated that the end-to-end deployment process will take 12-14 years for the
first small modular reactor.21
41
Since a system with a high proportion of renewable generation looks cost

effective in the long term, and adding more nuclear to the system in this
timeframe is unlikely, it makes sense to continue to add more renewables to the
system in the 2020s.
However, not all new sources of supply in the 2020s need be renewable.
Interconnectors, of which there is a large pipeline of projects, are likely to
become of increasing importance throughout this period, and the Government
should ensure that the current pipeline is not affected by the UK’s exit from the
EU. It may also be cost-effective to deploy a limited amount of new gas power
stations, provided they can be accommodated within the carbon budgets, and
recognising that load factors are likely to be on a reducing path.22
The Commission recommends that in order to keep the option of a highly
renewable system in 2050 open, at least 50 per cent of generation (in TWh)
should be renewable by 2030. This would be equivalent to between 12 and
19 GW of offshore wind being deployed, in addition to the current pipeline.23
The Commission’s analysis suggests that the budget of £557 million that the
government has set aside for future Contracts for Difference auctions may be
sufficient to achieve this, depending on the future wholesale price of electricity.24
However, if interconnectors do not deliver expected benefits, up to 65 per cent of
generation may need to be renewable to meet 2030 carbon targets.
The Commission recommends that government should set out a pipeline
of pot 1 Contracts for Difference auctions, to deliver at least 50 per cent
renewable generation by 2030, as part of the transition to a highly renewable
generation mix. Government should:
ll Move technologies that have recently become cost competitive,
such as offshore wind, to pot 1 following the next Contracts
for Difference auction in Spring 2019. Pot 1 should be used
for the overwhelming majority of the increase in renewable
capacity required.
ll Publish indicative auction dates and budgets for the next decade
by 2020.
ll Over time take whole systems costs into account in Contracts for
Difference auctions, as far as possible.
ll Consider whether there is a case for a small-scale, pot 2 auction in
the 2020s, if there are technologies which are serious contenders
for future pot 1 auctions.
ll Not agree support for more than one nuclear power station beyond
Hinkley Point C, before 2025.
42
Carbon capture and storage

The Commission’s analysis included carbon capture and storage (CCS) as a potential option for
the electricity system. Carbon capture and storage would allow the continued use of fossil fuels.
However, the Commission’s analysis showed that it rarely appeared to be a cost effective option
for reducing power sector emissions. In scenarios where small amounts were cost effective, this
was in the 2040s. This finding held even when carbon dioxide transport and storage costs were
assumed to be very low, indicating the outcome if carbon capture and storage had already been
built for other purposes. This shows it does not make sense for electricity consumers to subsidise
the development of carbon capture and storage, since it will not benefit them in future.
Generation CCS cost Percentage of CCS in the 2050

Heat decarbonisation scenario
scenario assumption generation mix
Central 1%
Hydrogen and biomass
Low 5%
40% renewable
Central 4%
Electrification
Low 8%
Central 0%
Hydrogen and biomass
Low 0%
90% renewable
Central 0%
Electrification
Low 0%
Figure 2.3: Percentage of generation from fossil fuelled power stations equipped with
carbon capture and storage in 2050 under different scenarios for generation mix, heat
decarbonisation pathways and carbon capture and storage costs
There are several other potential uses for carbon capture and storage, including the reduction
of emissions from industrial processes and combining it with biomass combustion to create
negative emissions. However, the most pressing reason to develop it at scale is likely to be for the
manufacture of low carbon hydrogen. This will be required if the UK chooses to remove carbon
emissions from heat through diluting or replacing natural gas with hydrogen, especially in the
absence of a global hydrogen market. Removing and storing the carbon from natural gas as part
of producing hydrogen is a simpler process than capturing it as it is burnt in a power station.25
Informing future decisions on heat

Reducing emissions from heating in an affordable way is the next challenge.
Currently 69 per cent of heat is produced through burning natural gas, a fossil
fuel.26 This must be radically reduced. Uncertainties around cost, technology,
and consumer behaviour means that it is difficult to decide the cheapest way to
replace natural gas to meet future Climate Change Act targets now. However,
this uncertainty is not an excuse for inaction in the near term. Low carbon heat at
lowest cost will benefit the environment and improve many people’s lives.
43
There are two potential large scale solutions for low carbon heat, and a range
of smaller solutions which may complement one of them. The first option is
electrification, using heat pumps to increase the efficiency of using electricity for
heating. Alternatively, hydrogen from a zero carbon source (which creates only
water vapour when burnt) could be used as a direct replacement for natural gas,
fuelling boilers and appliances.
Whilst there are incremental steps that can be taken to address some aspects
of the challenge, an incremental approach on its own will not be enough. In
the 2020s, decisions will be required on whether the gas network should be
maintained and converted, or phased out.
The Commission’s analysis shows that currently all routes to low carbon heat are
more expensive than maintaing the status quo, although the cost of heating as a
proportion of GDP in 2050 is estimated to reduce.27 The impacts of this cost will
also be offset by switching to cheaper forms of energy in other areas, particularly
transport.28 Central estimates indicate an average annual cost between now
and 2050 of £13 – 16 billion above the current system cost of £24 billion.29 These
figures are highly uncertain. Finding ways to reduce both the uncertainty and
magnitude of them must be a priority.
For government to make choices about the decarbonisation of heat in the 2020s,
there needs to be a coherent programme to ensure that the evidence to do so
is in place. This should include collaborating internationally on research and
development, to give government the confidence to invest in the best solution
when the time is right. The Commission plans to provide further advice to
government on this issue in the next National Infrastructure Assessment, taking
into account parallel strategies in Scotland and Wales.
The Commission recommends that government needs to make progress
towards zero carbon heat:
ll Establishing the safety case for using hydrogen as a replacement
for natural gas, followed by trialling hydrogen at community scale
by 2021.
ll Subject to the success of community trials, launching a trial to
supply hydrogen to at least 10,000 homes by 2023, including
hydrogen production with carbon capture and storage.
ll By 2021, government should establish an up to date evidence base
on the performance of heat pumps within the UK building stock and
the scope for future reductions in the cost of installation.
Buildings which require less energy to heat

Improving the insulation of buildings makes sense both now and in a low
carbon future. The Commission’s analysis suggests that there are over 21 million
individual improvements to buildings in England that together could save billions
of pounds. This includes insulating 10 million lofts, 6 million floors and almost
44
5 million walls. This is equivalent to 21,000 improvements being installed every

week between now and 2035.30 The current rate of progress is around 9,000
improvements installed per week.31
Delivering these improvements alone represents a major challenge. Driving
widespread improvements in energy efficiency is notoriously difficult. Different
interventions to stimulate uptake will be required across different segments of
the building stock.
However, an even more ambitious approach may ultimately be required.
The optimum level of energy efficiency is partly linked to the choice of heat
technology: in particular, heat pumps work best in buildings with reasonably high
insulation standards because they provide constant, but low temperature levels
of heat.
A range of different initiatives will need to be trialled and fully evaluated, learning
from international experience, and progress regularly reviewed. The government
will need to prepare for the fact that it is likely that some future energy efficiency
initiatives may fail. But this should not lead to a loss of momentum or enthusiasm
for energy efficiency. Alongside this, innovation in energy efficiency products and
processes should also continue to be supported, particularly for solid walls. An
immediate priority is the social rented sector. Under any approach, government
will inevitably bear most of the cost of improving energy efficiency either through
direct grants, support to social landlords or rental payments via Housing Benefit.
The Commission estimates that cost effective improvements to existing socially
rented properties would cost £3.8 billion. A ten year programme would meet
government’s own stated ambition of ensuring social rented properties reach at
least Energy Performance Certificate level C by 2030.32
The Commission recommends that government should set a target for the rate
of installations of energy efficiency measures in the building stock of 21,000
measures a week by 2020, maintained at this level until a decision on future
heat infrastructure is taken. Policies to deliver this should include:
ll Allocating £3.8 billion between now and 2030 to deliver energy
efficiency improvements in social housing.
ll Government continuing to trial innovative approaches for driving
energy efficiency within the owner occupier market.
ll Government setting out, by the end of 2018, how regulations in the
private rented sector will be tightened and enforced over time.
Incinerating less, recycling more

Low cost, low carbon waste is also necessary and achievable in the near term.
The Commission’s remit on waste covers England only, where waste generation is
expected to rise as the population grows. Energy from waste plants (incinerators)
facilitated the move away from landfill, and make sense when the alternative is
45
energy from fossil fuels. They incinerate ‘black bag’ waste and other wastes that
cannot be recycled, producing electricity and providing heat where there is a
source of demand nearby.
However, lower cost, lower carbon options exist for some types of waste, in
particular food waste and plastics. In these areas, England should not settle for
the minimum standards set out in EU legislation but should seek to be amongst
the best performers, learning from the example set by Wales.
Separating food waste

As an alternative to incineration, food waste can be treated in ‘anaerobic
digesters’. Anaerobic digesters break down biodegradable waste in the absence
of oxygen, producing biogas and a low grade fertiliser (‘digestate’) at a fraction
of the capital cost of incinerators.33 In future, technologies such as pyrolysis or
gasification, may also become available commercially.34
Biogas can be used as a low carbon substitute for natural gas. It can also be
converted to a range of biofuels, which may prove especially valuable in sectors
where fossil fuels are hardest to replace, such as aviation. Besides treatment,
there are benefits to collecting food waste separately, such as preventing the
contamination of other recyclable materials.
Using anaerobic digestors requires the separate collection of food waste, which
is typically collected weekly in household ‘caddies’ designed for the purpose. In
2014-15, only 26 per cent of English households had separate food collection.35
The Commission’s analysis shows universal food waste collection would avoid the
need to build between 1 and 3 energy from waste plants between now and 2050.
It would save up to £400m in capital costs and £1.1bn in operational costs for local
authorities in total between 2020 and 2050.36 37 This includes the cost of weekly
collections.
In the Commission’s social research, 79 per cent of participants without caddies
said they would be willing to use one.38 A higher recycling rate more generally
reduces the demand for residual waste infrastructure. By 2035, a 65 per cent
recycling rate, with separate food waste collection, would mean that 7 million
tonnes less residual capacity is needed, equivalent to 20 energy from waste
facilities.39
The Commission recommends that government should establish separate
food waste collection for households and businesses (to enable production of
biogas) by 2025.
46
Wales: a world leader in recycling

In 2008, Wales had a similar recycling rate to England (approximately 40 per cent). Today, Wales
has the third highest municipal recycling rate in the world (64 per cent).40
Wales achieved this through its ‘towards zero waste’ strategy. The strategy established ambitious
recycling targets for local authorities, mandated the separate collection of food waste and
provided a blueprint for standardised collection of other materials.41
To ensure local authorities had the capacity to deliver effective recycling collection systems,
the Welsh Government provided £68 million in capital support for recycling infrastructure.42
Additionally, the ability to fine local authorities that missed their recycling targets was
introduced.43 In practice, only one local authority has been fined; all that missed the targets were
referred to a support program. Communication campaigns were conducted to raise awareness of
what could be recycled.
By becoming a leader in recycling, Wales saw the total cost of collection for local authorities fall.
In the process, it avoided 105,000 tonnes of carbon dioxide emissions.
Reducing plastic waste

A more circular economy, with a higher recycling rate that keeps materials in use
for longer, could save local authorities a total of £6.2bn between 2020 and 2050.44
Targeting plastics is particularly important. Increasing the plastic recycling rate
will also reduce emissions generated from burning plastics (effectively a fossil
fuel) and reduce leachates that can contaminate local water systems when plastic
is landfilled.
Despite this, the UK’s plastic recycling rate is just 30 per cent.45 This is due to both
household behaviour, and product design. In England, 53 per cent of households
throw away items that could be recycled.46 This appears, at least in part, to be due
to a lack of clarity on recycling; the Commission’s social research suggests many
people would like to recycle more but find it complex and confusing.47,48
The first priority should be to reduce unnecessary packaging and other single use
plastics. The government have launched a range of consultations in this area. It is
important that these lead to action. Thereafter, it is important to target hard-to-
recycle materials. The way packaging is designed can alter the cost and viability of
recycling. To date, incentives in the waste system have been focused on weight.
The government is currently reviewing this approach, as reductions in weight may
have reached their limit. Setting incentives to improve product design could help
reduce the cost of recycling.
Some materials are particularly problematic. PVC can compromise recycling of
PET, which is otherwise widely recycled.49 Polystyrene is almost never economical
to recycle and particularly dangerous to marine life.50 In the long run, these
materials need to be replaced if packaging is to be sustainable. A clear timetable
47
by which these products would be phased out would allow industry to develop
sustainable alternatives.
A package of measures to improve supply of recyclable material, standardise
collection regimes and clarify labelling is needed to push recycling rates upwards.
Government initiatives and incentives to target specific products such as the
Deposit Return Scheme or recent proposals on packaging reform are important
steps forward, but they need to work alongside ambitious headline targets.51
The Commission recommends that government should set a target for
recycling 65 per cent of municipal waste and 75 per cent of plastic packaging
by 2030. Government should set individual targets for all local authorities and
provide financial support for transitional costs.
The government should establish:
ll Clear two symbol labelling (recyclable or not recyclable) across the
UK by 2022.
ll A consistent national standard of recycling for households and
businesses by 2025.
ll Restrictions on the use of hard-to-recycle plastic packaging (PVC
and polystyrene) by 2025.
ll Incentives to reduce packaging and for product design that is more
easily recyclable by 2022.
ll A common data reporting framework for businesses handling
commercial and industrial waste by the end of 2019, ideally through
voluntary reporting but if necessary by legislation.
48
Endnotes
1
CCC (2018), Reducing UK emissions: 2018 Progress Report to Parliament
2
Technical annex: Energy and fuel bills today and in 2050, July 2018
3
Ibid
4
Ibid
5
Ibid
6
Aurora Energy Research (2018), Power sector modelling: System cost impact of renewables, Report for the National
Infrastructure Commission. Rebased from 2016 prices.
7
Jones (2012), UKERC Technology and Policy Assessment, Cost Methodologies Project: Onshore Wind Case Study; Gross
et al (2013), Presenting the Future: An assessment of future costs estimation methodologies in the electricity generation
sector UKERC (2012), Cost Methodologies Project: Onshore Wind Case Study and UKERC (2013), Presenting the Future:
Electricity Generation Cost Estimation Methodologies
8
Constructed by the Commission using data from Lovering J. R; Yip A.; Nordhaus T. (2016), Historical construction costs
of global nuclear power reactors. Costs calculated on an ‘overnight’ basis, rebased from 2010 prices.
9
National Audit Office (2017), Hinkley Point C
10
Infrastructure Commission
11
Ibid
12
National Infrastructure Commission (2016), Smart Power
13
Thornton el al (2017), The Relationship between wind power, electricity demand and winter weather patterns in Great
Britain, Environmental Research Letters; Sinden (2005), Characteristics of the UK wind resource: long term patterns
and relationship to electricity demand, Energy Policy; Brown, T. W. et al (2018), Response to ‘Burden of proof: A
comprehensive review of the feasibility of 100% renewable electricity systems’
14
15
Department for Business, Energy and Industrial Strategy (2017), Policy paper: Contracts for Difference
16
BEIS (2018), Energy and Climate Change Public Attitudes Tracker (PAT): Wave 25 – summary report
17
18
Hendry, C. (2016), The role of tidal lagoons
19
20
Ibid
21
Atkins (2016): SMR Techno-Economic Assessment
22
23
Commission calculations based on Aurora Energy Research (2018), Power sector modelling: System cost impact of
renewables, Report for the National Infrastructure Commission and data provided by the Low Carbon Contracts
Company.
24
Commission calculations based on Aurora Energy Research (2018), Power sector modelling: System cost impact of
renewables, Report for the National Infrastructure Commission, data provided by the Low Carbon Contracts Company
and Department for Business, Energy and Industrial Strategy (2017), Contracts for Difference: Allocation Framework for
the second Allocation Round
25
Damen, K. (2007), A comparison of electricity and hydrogen production systems with CO2 capture and storage
26
BEIS (2017), Energy consumption in the UK 2017 update
27
Element Energy and E4Tech (2018), Cost analysis of future heat infrastructure options, National Infrastructure
Commission calculations
28
Energy costing note, 2018/19 prices
29
Element Energy and E4Tech (2018), Cost analysis of future heat infrastructure options, National Infrastructure
Commission calculations
30
Element Energy and E4Tech (2018), Cost analysis of future heat infrastructure options
31
BEIS (2018), Household Energy Efficiency National Statistics
32
HM Government (2017), The Clean Growth Strategy
33
Anthesis (2018) National Infrastructure Assessment: Waste Infrastructure Analysis for England, Report for the National
34
Energy Technologies Institute (2017), Targeting New and Cleaner Uses for Wastes and Biomass Using Gasification
35
WRAP (2016), Household food waste collections guide
36
Anthesis (2018) National Infrastructure Assessment: Waste Infrastructure Analysis for England, Report for the National
37
Ibid
38
Ipsos MORI (July 2018), National Infrastructure Commission phase 2: public research
39
Anthesis (2018) National Infrastructure Assessment: Waste Infrastructure Analysis for England
40
Eunomia (2017), World Recycling League; Welsh Government (2017) Local Authority Waste Management Report for
Wales, 2016-17
41
Welsh Government (2018) Evidence submitted to the National Infrastructure Commission
42
Ibid
43
Ibid
44
Anthesis (2018) National Infrastructure Assessment: Waste Infrastructure Analysis for England
49
45
Eunomia (2018), Plastic Consumption and Waste Management
46
Wrap (2017) Recycling Tracking Survey 2017 Behaviours, attitudes and awareness around recycling
47
Ibid
48
49
Deloitte (2015), The New Plastics Economy
50
Nguyen (2012), An Assessment of Policies on Polystyrene Food Ware Bans
51
Wrap, Incpen (2018) Letter submitted to Rt. Hon. Secretary of State for Environment, Food and Rural Affairs.
50
3. REVOLUTIONISING
ROAD TRANSPORT
51
National
Assessment
GETTING READY FOR THE

ROADS REVOLUTION
Vehicles of the future will be cheaper, cleaner, quieter and safer.
As prices fall and range increases, take up
of electric vehicles could accelerate rapidly
Charge point
ELECTRIC VEHICLES MEAN: infrastructure is
required to enable
1 Cleaner air close to 100% electric
vehicles contribute to 80% new car and van sales
of air pollution breaches in 2030
and 34% of greenhouse
gas emissions
3
Flexibility for the
2 Lower costs energy system
electric motors are 3 times smart charging is a form
as efficient as petrol of flexible demand
CONNECTED, AUTONOMOUS VEHICLES WILL MEAN:
Safer roads Accessibility Time freed up

over 1,700 people are more people can driving takes an
killed on the roads travel by car average of 140
per year hours per year
X
52
National Commission
Commission
BUT ROADS WILL NEED TO CHANGE. SOME IDEAS ARE:
1 Connecting cars and

traffic signals, instead
of waiting at the lights
4 Variable speed
limits, smoothing
the flow of traffic
3 Separate lanes, instead

2 Flexible curbs changing of mixing different types
use through the day, of vehicle
instead of yellow lines
5 Automatic re-routing
of journeys, instead
of traffic jams
Making it easier to convert Investing in the electricity

parking spaces and provide network to achieve the
charge points on the street benefits of electric
vehicles
Future road and rail

investment plans need
to reflect the impact of Government support
connected and for rural charge points
autonomous vehicles
Sources: Defra, BEIS, Newbury and Strbac, Aurora Energy Research, DfT, NIC Roads for the Future Competition entries
53
X
Most journeys in the UK are made by road. After 100

years of incremental change, road transport is about to
undergo a revolution. More electric cars and vans are
being built and sold, and autonomous vehicles could
soon be on the roads too. These vehicles will change the
nature of the transport debate in the UK. Conventional
vehicles bring pollution, noise and accidents; electric
vehicles are cleaner and quieter, and connected and
autonomous vehicles could make roads safer.
The UK is one of the top European countries in terms of electric vehicle sales,1
and government already supports the move to electric vehicles.2 But the UK
should speed up its preparations; electric vehicles are fast becoming cheaper
and better, and take up could accelerate. With the right conditions, including
a national network of electric vehicle charge points, the UK could become a
world leader in electric vehicles.
There is also potential for the UK to become a world leader in connected and
autonomous vehicles. KPMG has ranked the UK fifth in the world in terms of
readiness for connected and autonomous vehicles, 3 and the UK is home to
many companies developing this technology. The Commission has launched an
innovation competition for ideas on how to deliver world-class roads ready for
this revolution: ‘Roads for the Future.’
Government must set a clear policy direction to encourage private sector
investment in charging infrastructure for electric vehicles, and to prioritise
research and innovation for connected and autonomous vehicles in the longer
term. This will require:
ll enabling electric vehicles to provide additional flexibility to the
energy network
ll enabling commercial charge point provision, with support in rural
areas
ll putting connected and autonomous vehicles at the heart of
government planning
ll preparing roads for connected and autonomous vehicles.
Electric vehicle uptake predictions

Electric cars and vans could become widespread ahead of most predictions, as
prices continue to fall. Price falls are being driven by reductions in the cost of
batteries, the most expensive component of an electric vehicle. Battery prices
fell by 80 per cent between 2010 and 2016.4 This initially meant that the range of
electric vehicles could be extended: some cars can now travel up to 300 miles
54
on a single charge.5 Once ranges are sufficient, further falls in battery prices
can translate directly into falls in the prices of the vehicles.6 Upfront cost parity
between electric and conventional vehicles is now expected by the mid‑2020s.7
And as purchase prices become comparable, fully electric vehicles will look
increasingly attractive, as they are cheaper to run.8 As these facts emerge,
projections are evolving to reflect them: figure 3.1 shows how National Grid’s
electric vehicle uptake estimates have increased over the past three years.
10,000,000
National Grid EV uptake estimates ranges from 2015 to 2017
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
2015 low uptake 2015 high uptake 2016 low uptake
2016 high uptake 2017 low uptake 2017 high uptake
Figure 3.1: Range of battery electric and plug-in hybrid vehicle uptake
estimates from National Grid’s Future Energy Scenarios9
Given current industry momentum and falling costs, it looks like electric
vehicles, rather than alternatives such as hydrogen, will capture the market for
low emission cars and vans in the short to medium term. It is too early to know
if electric vehicles are the future for larger vehicles. The Commission’s study on
the future of the freight system, due to report in Spring 2019, will consider how to
reduce emissions and congestion from road freight.
New technologies typically follow an s-shaped diffusion curve, which starts to
accelerate as uptake moves into the ‘take-off’ period. This can start when they
have reached 5 per cent of their potential market.10 Figure 3.2 demonstrates how
sales of videos declined as consumers switched to purchasing DVDs.
55
700
European video cassette and DVD sales
600
500
Sales, millions
400
300
200
100
0
1998 1999 2000 2001 2002 2003 2004 2005 2006
video cassettes sold DVDs sold
Figure 3.2: Sales of video cassettes and DVDs in Europe over time showing a
typical s-shaped technology diffusion curve.11
In 2017, electric and hybrid vehicles represented 1.8 per cent of all new
registrations, up 27 per cent on the previous year.12 Electric vehicles could
therefore soon enter the ‘take-off’ stage in the UK. Some projections suggest
that the UK could even see 100 per cent sales of electric vehicles by 2027, and 100
per cent stock by 2042.13
A 2016 Department for Transport survey showed concern about recharging was
the most significant factor preventing consumers buying an electric vehicle (45
per cent), followed by the distance travelled by one charge (39 per cent).14 But
aside from the need for a charging network, electric vehicles are likely to become
increasingly attractive to consumers.
The uptake of electric vehicles will also depend on supply. Car manufacturers
are beginning to ramp up electric vehicle production. Ford, the best selling car
maker in the UK today, plans to have 40 fully electric or hybrid models in its global
line‑up by 2022, while Volkswagen, the second best selling car maker, is targeting
80 fully electric or hybrid models by 2025.15 At Nissan’s factory in Sunderland,
electric vehicles roll off the same production line as petrol and diesel vehicles.
A rapid increase in uptake of electric vehicles is not certain. But it is certain
that electric vehicles reduce the cost of driving, lower air pollution, and
reduce emissions, in addition to supporting a highly renewable energy system.
Therefore, government should encourage and facilitate the swiftest possible
uptake of electric vehicles.
The Commission recommends that government, Ofgem and local authorities
should enable the roll out of charging infrastructure sufficient to allow
consumer demand to reach close to 100 per cent electric new car and van sales
by 2030.
56
Electric vehicles and the energy system

The transition to electric vehicles will provide additional, low cost flexibility for
the energy system.16 When electric vehicles are able to follow price signals and
charge when demand is low (‘smart’ charging), they help to smooth out daily
electricity demand. As shown in figure 3.3, the daily demand profile with electric
vehicles leads to a lower proportion of capacity being spare throughout the day
than without electric vehicles. This means that electricity networks are used more
efficiently and reduces the need for other types of flexibility, such as small gas
engines and batteries. Overall system costs are reduced.17 Furthermore, batteries
considered at the end of their useful life in an electric vehicle may still retain up
to 80 per cent of their original capacity.18 These batteries can provide a source of
storage for the grid, reducing the need for further investment (and supporting
the price of second-hand electric vehicles).
50%
40%
Percentage of spare capacity
30%
20%
10%
0%
00:30
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
11:30
12:30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
with EVs without EVs average average
Figure 3.3: Percentage of spare generation capacity throughout the day with
electric vehicles and without19
The Commission’s analysis suggests that a 100 per cent uptake of electric cars
and vans could increase total annual electricity demand by 26 per cent by 2050.20
However, as electric engines are more efficient than petrol or diesel, each car
would use less energy overall,21 and as electricity becomes increasingly low
carbon, emissions would reduce. Chapter 2 sets out how the UK can achieve
a low cost, low carbon energy system, whilst accommodating an increase in
electric vehicles.
Smart charging
Smart charging is essential for reducing the overall cost of the energy system
as the number of electric vehicles increases. Not putting in place the necessary
policy incentives could increase power system costs by £2 billion per year on
57
average (2030-50), adding up to £30 per year on average to consumer bills

(2030‑50).22 This would primarily be driven by increased power prices and
electricity network reinforcement costs.23 Smart charging will be much cheaper
for the consumer than on-demand, rapid charging, as prices are likely to be lower
when there is less demand on the electricity network.
Smart charging should therefore be the default option for home charging. There
is likely to be an overall consumer preference for smart and slow charging.24 But
this is not certain. It is slightly less convenient, and carries some risk if a car is
needed for a long journey earlier than expected.
Regulation
The Office for Low Emission Vehicles works to support the early market, and
the Automated and Electric Vehicles Bill, which is currently before Parliament,
will give government powers to make regulations on the specification of charge
points (including requiring all charge points to be smart and interoperable).25
Given the importance of managing the interaction between charging and the
energy system, it makes sense for Ofgem to take on the role of ensuring that
there are arrangements to optimise use of chargers within the energy system.
Ofgem should also consider whether there is a need to protect consumers from
spikes in energy prices which could make rapid charging prohibitively expensive.
Consumers should be able to refuel their car in an emergency without having to
pay over the odds.
Government, industry and Ofgem should work together with the Office for
Product Safety and Standards, the Institute of Engineering and Technology and
the International Standards Organisation to ensure interoperability and the
development of minimum standards for charge points.
The Commission recommends that Ofgem should take on the role of
regulating the interaction between electric vehicle charge points and the
electricity network immediately, ensuring that electric vehicle charging and
vehicle to grid services contribute to the optimisation of the energy system.
Government, industry and Ofgem should work together to set minimum
standards for a network of interoperable, smart charge points.
A national network of charge points

Developing a nationwide, electric vehicle charging network offers the chance
for the UK to get ahead. Too often in the past, short-term interests, a lack
of coordination, and a tendency to endlessly debate difficult issues and
delay difficult decisions have meant the UK has been slower to adopt new
infrastructures than other countries. This time can be different.
Government funding is already available in the form of grants for home,
workplace and on-street residential charge points. The Autumn Budget 2017
announced a new £400 million Charging Infrastructure Investment Fund,
58
including £200 million of investment from the private sector.26 However, so far,
no private sector partner has been procured.27
Supporting charge point installation

Building electric vehicle charge points represents a big opportunity for the
private sector. Demand for charge points is likely to grow.
Charge points are already being built across the country, growing from a total
of 2,880 points in 2012 to 14,160 points in 2017.28 Chargemaster plc plans to
expand its POLAR charging network to 25,000 chargers by 2020.29 A UK-based
energy company, Pivot Power, is working with National Grid to build 45 new
charging sites, each with up to 100 charge points, across the country, investing
£1.6 billion.30 And some petrol companies, such as Shell, have already begun
installing electric vehicle charge points at their petrol forecourts.31
However, some potential charge point providers may be put off by the uncertain
cost of connecting new charging infrastructure to the electricity network.
New connections can trigger the need for network reinforcement, which the
customer pays a proportion of as a connection charge.32 Ofgem aims to avoid
imposing general charges for reinforcement costs, preferring to link them to a
customer’s own network usage. However, this needs to take into account the
indirect system benefits from both rapid and smart chargers.
Rapid charge points are more likely to trigger reinforcements than slow, smart
chargers. They do not directly benefit the energy system in the way that smart
chargers do. However, at present rapid chargers also provide an indirect benefit
to the electricity network by reducing range anxiety, incentivising uptake and
therefore incentivising the spread of smart charging.
Passing reinforcement costs on to public charge point providers risks reducing
the amount of charge points installed and ultimately ignores the benefits that
network users gain from an electric vehicle fleet. Ofgem’s recent process to look
into whether extra investment was required concluded that given the current
pace of change it was unlikely to be needed before 2023. However, this was only
done in consultation with network owners and not with the aim of facilitating a
rapid uptake of electric vehicles.33
The Commission believes that this represents a missed opportunity. Ofgem
should take a more proactive approach to preparing for future reinforcement
needs for charging points; electricity networks should work with charge point
providers to identify likely future reinforcements and invest ahead of time.
The Commission recommends that Ofgem should commission electricity
network operators to work with charge point providers to identify potential
anticipatory investments required to accommodate public charging
infrastructure. Opportunities for investment within the current price control
period should be identified by Summer 2019.
59
Furthermore, engagement with local authorities should not hold up the process
of delivering charge points. Local authorities should work with commercial
investors, make it easy for charge points to be built on their land, require charge
points to be built as part of new developments, and free up parking spaces to be
used for electric vehicle charging.
If travel patterns and car ownership models are fundamentally disrupted, vehicles
may park and charge in different locations to today. But in the short term
ensuring that charge points are installed and accessible for electric vehicles, and
that this rollout is balanced against the needs of drivers of internal combustion
engine vehicles, must be a priority.
On-street charge points for electric vehicles will be particularly important in
dense urban areas where access to home off-street parking is limited, but these
are the same areas where parking spaces in general will be at a premium. Local
authorities will need to work with private sector providers and electricity network
owners to identify where demand for charge points is likely to be highest,
and ensure that there are sufficient parking spaces available for charge point
installation as demand materialises.
The Commission recommends that government should place a requirement
on local authorities to work with charge point providers to allocate 5 per cent
of their parking spaces (including on-street) by 2020 and 20 per cent by 2025
which may be converted to electric vehicle charge points.
A visible core network

Although the majority of charge points are likely to be slow and smart, having a
core network of visible, rapid chargers in place could significantly increase the
pace of uptake. This network should provide both sufficient coverage, so that it
is possible to find a charge point within a reasonable distance throughout most
of the country, and enough power to fully recharge an electric vehicle within a
reasonable timescale (for example within 1 hour). To enable close to 100 per cent
of new car and van sales to be electric by 2030, the core network would need to
be in place in the early 2020s to avoid inhibiting electric vehicle uptake.
The charge point network is often compared to the petrol station network but
differs in two respects. Firstly, drivers of petrol and diesel vehicles do not suffer
from range anxiety. Consumer confidence already exists in the petrol station
network. Visible charge points in more places will combat this issue for potential
electric vehicle drivers, and allay their concerns about being able to travel
anywhere in the UK.
Secondly, the shape of the charging network is likely to be different to the petrol
station network. Electric vehicle owners are more likely to recharge in towns and
places where they can undertake other activities, than stop en-route. And petrol
stations need to be accessible for fuel deliveries, which is not a consideration for
charge points.
60
The pattern of private sector provision of charge points in the early stages of
the electric vehicle market is likely to be similar to mobile and fixed broadband,
where provision is strong in densely populated areas, but rural areas are initially
underserved. Charge points in rural locations, which benefit users and society by
contributing to a complete network providing coverage across the country, will
not be as profitable as those in urban centres and main arterial routes, and many
of the benefits from providing this network will go to electric vehicle purchasers
and manufacturers rather than charge point providers. Therefore, commercial
investors are less likely to build charge points in rural areas before electric
vehicles become the mainstream choice.
This means there is a case for government support to build charge points in
rural areas, to deliver a core national network in the short term, before relying
entirely on the private sector to take forward the delivery of the network at scale
as the pace of uptake increases. There are 332 ‘built-up’ areas34 in the UK with
populations above 20,000. 187 of these are not served by a rapid charger. There
are 145 built-up areas with populations above 50,000, 52 of which are not served
by a rapid charger (shown in figure 3.4).
Population Towns and cities with/without charge points

over
400,000 llllllllllllllll
200,000 -
400,000
llllllllllllllllllllll
50,000 - lllllllllllllllllllllllllllll
200,000 lllllllllllllllllllllllllllll
lllllllllllllllllllllllllllll
llllllllllllllllllll
20,000 - lllllllllllllllllllllllllllllllllllllll
50,000 lllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllllllllllll
lllllllllllllllllllllllllllllll
Figure 3.4: Proportion of built-up areas with at least one rapid charge point in
June 2018 (by population) 35
At least one rapid charger in each of those places would represent a reasonable
core network. The cost of installing a rapid charger is around £50,000, so the
costs of installing chargers at 200 currently unserved locations would be around
£10 million. Government does not need to directly own or operate these charge
points.
The Commission recommends that government should subsidise, by 2022, the
provision of rapid charge points in rural and remote areas, where the market
will not deliver in the short term.
61
Preparing for connected and autonomous vehicles

Whilst electric vehicles represent a revolution in how vehicles are powered,
the changes delivered by connected and autonomous vehicles could be more
profound still. Connected and autonomous vehicles could have implications for
the roads themselves, as well as the way people travel.
Connected vehicles can communicate with other vehicles or infrastructure on
the road network, to assist with safer and better informed driving. Autonomous
vehicles use a range of technologies to reduce the need for human involvement
for navigating the road. These vehicles will have impacts on infrastructure design,
capacity, demand, travel patterns, land use, and interactions between transport
modes. All this is not yet understood. Government should start planning for these
changes now.
Connected and autonomous vehicles will create new travel opportunities, free up
time focused on driving, and could improve safety. They could also increase road
capacity, enable higher speed limits and shorter journey times, encourage vehicle
sharing, and release street space currently used for parking. Traffic lights and stop
signs may become unnecessary. And the use of road space could be automatically
and constantly changing according to need.
It is uncertain when fully autonomous vehicles will be a reality on the roads.
Existing technology can already control the vehicle in a wide range of
circumstances and is increasingly being deployed within cars on the market
today.36 Some estimates suggest that self-driving cars could be on the road
by the 2020s,37 although others predict this will take much longer. But despite
uncertainty about the timetable and extent of change, it is no longer reasonable
to assume existing patterns of road use will remain unchanged in future.
Government must first act decisively on the Commission’s recommendation
in Connected Future to roll out digital connectivity across the road network,
starting with the strategic roads network by 2025.38 Research indicates that
improved connectivity, either 5G or in other forms, could enhance the road
capacity benefits of automation by improving vehicle-to-vehicle and vehicle-to
infrastructure communication.39
The potential impacts and benefits of connected and autonomous vehicles vary
in different places and on the level of automation. For example, in urban areas,
although careful management will be needed to avoid adding to congestion,
automated on-demand public transport options could provide more convenience
than buses or trams. Road transport is unlikely to supplant rail in its core markets:
commuting into city centre (where physical space is a key limitation) and long
distance city centre to city centre travel (where rail has a speed advantage).
However, overall, connected and autonomous vehicles could have a significant
positive impact on interurban connectivity.
62
Building the evidence base

Government has made a good start in positioning the UK as a centre of excellence
for connected and autonomous vehicles. It has created a conducive environment
for trialling, stimulated private sector innovation through various funding
initiatives, and launched an extensive review of the regulatory environment. It has
also begun to think strategically about the longer-term implications for transport
through programmes such as the Industrial Strategy’s Grand Challenge on the
Future of Mobility.
These key steps are welcomed by the Commission. But the research programme
now needs to evolve to ensure that connected and autonomous vehicles are
central to transport policy and investment decision-making in future. In October
2017, government was funding at least 53 separate research projects, but the
evidence on the impact of connected and autonomous vehicles has so far not
been sufficient to influence the latest plans for road and rail (the second Road
Investment Strategy and Network Rail’s Control Period 6).
Planning for the 2025-2030 investment period, when highly autonomous vehicles
are predicted by some to be on sale, will begin in the early 2020s. Government
should aim for evidence on the impact of connected and autonomous vehicles
to be sufficiently robust to start to factor in policy making for both planning
processes.
The Commission recommends that government should address the
implications of technological innovation in long term transport planning
processes, including the next rail control period and road investment strategy.
A research framework
A research framework is required, focussing on four key areas: technology;
legislation and regulation; people; and infrastructure. Extensive work is already
being undertaken on the first two areas. Therefore, the priority for new research
within the framework should be to focus on people and infrastructure, where
research is less advanced. These two areas are fundamentally linked; how roads
are changed to accommodate connected and autonomous vehicles will reflect
and impact how, where, when and why people choose to use them and other
forms of transport.
To assess people’s behaviour patterns, trials will need to ensure that the
information gathered is useful and reflects a wide cross-section of the public.
While reliable forecasts of the take up and use of connected and autonomous
vehicles are not likely to be developed until highly autonomous cars are on sale,
government should focus on improving existing analytical tools to prepare as far
as possible.
In terms of infrastructure, the government will ultimately need to determine
changes in the way roads are planned, designed and operated to maximise the
potential benefits of connected and autonomous vehicles. A key question will be
63
how acceptable it is for individual drivers to give up a degree of control, at least

on parts of the road network, to improve the outcome for road users. Despite
the uncertainty, the process of thinking about how roads should adapt must start
now, and take a flexible approach.
Roads for the future

The Commission launched ‘Roads for the Future’ in January 2018: an innovation competition on
how roads should be designed, managed and used to maximise the benefits of connected and
autonomous vehicles. An overall winner will be announced in September. The shortlisted entries
are:
Smart signals, AECOM, York: Examining how smart signals could alert drivers and vehicles to the
speed they should drive at so they arrive at the next set of traffic lights just as they turn green,
cutting congestion and ending polluting ‘stop-go’ driving.
Active traffic management, Leeds City Council, Leeds: Examining how the data generated
from digitally connected cars could be used to improve traffic light systems, allowing highway
authorities to better manage traffic on their roads.
FlexKerbs, Arup, London: Looking at how kerbsides with fixed features such as double yellow
lines, parking bays and bus stops could become more flexible, changing their use according to
the time of day and levels of demand.
AI short term traffic prediction, Immense Simulations, Oxford: Using AI to help sat-nav systems
to ‘learn’ better routes to improve the directions given, so that both driven and driverless cars
could change course to avoid congestion.
Segregated connected and autonomous vehicle zones, City Science, Exeter: Examining how
sections of existing roads could be dedicated to driverless cars, making it easier for highways
authorities to manage risks, integrate connected and autonomous vehicles into the existing
transport network, and encourage take-up.
To ensure that the framework is delivered and connected and autonomous

vehicles are fully embedded in long-term transport planning processes the
right structures need to be in place within government. At present, there is no
single long-term home within government for research and analysis into future
disruptive transport technologies.
The Commission therefore believes that a new body should be created, subsuming
the Centre for Connected and Autonomous Vehicles’ current functions but with
a wider policy remit and a more influential role in the Department for Transport’s
long-term transport planning processes. Amongst its responsibilities should be
the Commission’s proposed connected and autonomous vehicles framework.
However, its core focus should be on ensuring that technological innovation is
fully embedded in the planning processes for the third Road Investment Strategy
and the next rail investment cycle, Control Period 7.
64
The Commission recommends that government should establish a centre

for advanced transport technology in the Department for Transport to bring
together work on technological innovation and ensure its implications are
central to future investment proposals. This should include developing and
overseeing the Commission’s proposed connected and autonomous vehicles
framework.
65
Endnotes
1
International Energy Agency (2017), Global EV Outlook 2017
2
HM Government (2017), Plan for roadside NO2 concentrations published. Accessed at: https://www.gov.uk/government/news/plan-for-roadside-
no2-concentrations-published
3
KPMG (2018), Autonomous Vehicles Readiness Index
4
McKinsey (2017), Electrifying insights: How automakers can drive electrified vehicle sales and profitability
5
Tesla (2018), Model S range of around 300-400 miles https://www.tesla.com/en_GB/models; and Nissan (2018) Leaf range of 168 miles. In practice,
range depends on driving conditions. https://www.nissan.co.uk/vehicles/new-vehicles/leaf/range-charging.html
6
McKinsey (2017), Electrifying insights: How automakers can drive electrified vehicle sales and profitability
7
Bloomberg New Energy Finance (2018), Electric Vehicle Outlook 2018
8
Energy Saving Trust (2018), Electric Vehicles. Accessed at: http://www.energysavingtrust.org.uk/transport-travel/electric-vehicles
9
National Grid, Future Energy Scenarios 2017, 2016 and 2015
10
Everett Rogers (1962), Diffusion of Innovations
11
International Video Federation (2004–2006). Market information, Europe key data. Accessed at: http://www.ivf-video.org/index.php?category/
Market-information
12
Society of Motor Manufacturers and Traders (2018), EV registrations. Accessed at: https://www.smmt.co.uk/2018/01/december-ev-registrations/
13
IMF (2017), Riding the Energy Transition: Oil Beyond 2040
14
Department for Transport (2016), Public attitudes towards electric vehicles: 2016 (Revised)
15
Reuters (2018), Ford plans $11 billion investment, 40 electrified vehicles by 2022. Accessed at: https://uk.reuters.com/article/us-autoshow-detroit-
ford-motor/ford-plans-11-billion-investment-40-electrified-vehicles-by-2022-idUKKBN1F30YZ and https://www.volkswagenag.com/en/
news/2017/09/Roadmap_E.html
16
Aurora Energy Research (2018), Power sector modelling: System cost impact of renewables, Report for the National Infrastructure Commission
17
Aurora Energy Research (2018), Power sector modelling: System cost impact of renewables, Report for the National Infrastructure Commission
18
Saxena, Le Floch, MacDonald, Moura (2015), Quantifying EV battery end-of-life through analysis of travel needs with vehicle powertrain models
19
National Infrastructure Commission analysis of Aurora Energy Research (2018), Power sector modelling: System cost impact of renewables, Report for
the National Infrastructure Commission
20
Ibid. This is the same whether smart charging is mandated or not; smart charging reduces peak demand, not annual demand
21
AEA Consulting (2012), A review of the efficiency and cost assumptions for road transport vehicles to 2050: Report for the Committee on Climate
Change
22
Aurora Energy Research (2018), Power sector modelling: System cost impact of renewables, Report for the National Infrastructure Commission, 2016
prices
23
Aurora Energy Research (2018), Power sector modelling: System cost impact of renewables, Report for the National Infrastructure Commission, 2016
prices
24
Ipsos Mori (2018), National Infrastructure Commission, Phase 2: public research
25
Automated and Electric Vehicles Bill 2017-2019. Accessed at: https://services.parliament.uk/bills/2017-19/automatedandelectricvehicles.html
26
HM Treasury (2017), Autumn budget 2017
27
Hansard (2018), Parliamentary question on the timetable for the Charging Infrastructure Investment Fund. Accessed at: https://www.parliament.uk/
business/publications/written-questions-answers-statements/written-questions-answers/?page=1&max=20&questiontype=AllQuestions&house=
commons&member=4320&keywords=electric%2cvehicles
28
Zap-map (2018), Charging connectors by type 2011-2017. Accessed at: https://www.zap-map.com/statistics/#charger-type
29
Chargemaster plc (2018), One million public EV charging sessions per year by 2020 on POLAR network
30
Pivot Power (2018), Pivot power to work with national grid to future-proof energy system and accelerate electric vehicle revolution. Accessed at:
https://www.pivot-power.co.uk/pivot-power-work-national-grid-future-proof-energy-system-accelerate-electric-vehicle-revolution/
31
Shell (2017), Shell launches electric vehicle charging service in the UK. Accessed at: https://www.shell.co.uk/about-us/latest-news-and-
features/2017-news-and-features/shell-launches-electric-vehicle-charging-service-in-the-uk.html
32
Ofgem (2017), Written evidence to the Department for Business, Energy and Industrial Strategy Select Committee. Accessed at: http://data.parliament.
uk/writtenevidence/committeeevidence.svc/evidencedocument/business-energy-and-industrial-strategy-committee/electric-vehicles-
developing-the-market-and-infrastructure/written/72781.html#_ftn37
33
Ofgem (2018), Decision on a Mid-Period Review for RIIO-ED1
34
ONS definition of built-up area is ‘land which is irreversibly urban in nature’, meaning they are characteristic of towns or cities
35
Commission analysis from https://data.gov.uk/dataset/1ce239a6-d720-4305-ab52-17793fedfac3/national-charge-point-registry
36
National Infrastructure Commission (2017), Congestion, Capacity, Carbon: Priorities for National Infrastructure
37
38
National Infrastructure Commission (2016), Connected Future
39
Atkins (2016), Research on the Impacts of Connected and Autonomous Vehicles (CAVs) on Traffic Flow
66
4. TRANSPORT AND
HOUSING FOR
THRIVING CITY
REGIONS
67
National
Assessment
CITIES ARE THE PRIORITY FOR

FUTURE TRANSPORT INVESTMENT
Investing in urban transport can support productivity
and quality of life
Intercity transport is getting
the investment it needs
Highways England Network Rail High Speed 2
4 billion 6 billion 4 billion

per year (2020-25) per year (2019-24) per year (2020-30)
GVA per capita relative to national average for relevant country

BUT:
Munich 39%
productivity is low in London 39%
28%
too many UK cities, Milan
Hamburg 28%
unlike in Europe Cologne 20%
Rotterdam 13%
Utrecht 5%
Turin 5%
Bristol/West of England 1%
Merseyside -10%
Greater Manchester -12%
Naples -13%
West Midlands -13%
West Yorkshire -14%
Transport networks are close to capacity in many UK cities
In cities, better cars can’t Bus

solve the problem as there
isn’t enough space
68
X
National Commission
Commission
Mass rapid transport is needed to increase accessibility

Typical maximum capacity per lane (inbound passengers per hour)
720
1,800 2,100 2,880
Car Bus Bus rapid Tram

transit
But transport alone isn’t enough – cities need skills,

green space, cultural and leisure activities
MUSEUM
THEATRE
City-led plans for Devolved, long-term Major projects in the

transport to connect funding to give fastest growing, most
housing and jobs certainty to all cities congested cities
Sources: HM Treasury, Network Rail, Department for Transport, Eurostat, ONS, Steer Davies Gleave
69
X
Cities can and should be great places to live and work.

But their increasing popularity means they are becoming
full and congested, and this risks inhibiting growth and
undermining quality of life. Space in cities should be
used effectively, with room allocated for fast, frequent
public transport systems, well connected and affordable
housing, and pleasant public spaces. This will require a
new approach to governance, strategy and funding for
urban transport.
In recent years, government has prioritised major upgrades to transport
between cities. The next wave of major upgrades should increase the focus on
transport within cities. Infrastructure cannot drive growth alone; other factors,
especially skills, are essential. But lack of infrastructure can inhibit growth.
The UK is unusual in that most large cities outside of the capital are less
productive than the national average; cities such as Birmingham and Leeds
should have the potential to be as successful as major cities elsewhere in
Europe which boost their countries’ productivity.1 But this will require vision
and planning. London, and to some extent Manchester, have benefitted from
having a mandate to transform their cities’ transport infrastructure. Other
cities, large and small, need to be able to take the same approach.
Unlocking growth in cities requires:
ll developing integrated strategies for housing, employment and
transport, to allow cities to grow and people to live and work where
they want
ll devolving planning and funding for urban infrastructure to all cities
ll prioritising major upgrades for cities with the most growth
potential and capacity constraints
ll £43 billion of additional investment in urban transport by 2040
Cities as social and economic hubs

Cities2 are increasingly critical to the UK’s economy and international
competitiveness. The benefits of firms in knowledge based services clustering
together in close proximity has made city centres attractive places for firms to
locate, leading to a revival in many cities’ fortunes.3 They are hubs for high value
industries and employment; 60 per cent of all jobs and 71 per cent of knowledge
intensive business service jobs are in cities.4 Supporting growth in city-regions
is essential to providing balanced growth across the UK, as cities provide
employment and a range of specialist services across a whole region.
70
Cities have also become more attractive places to live as they have attracted
highly skilled workers and cultural and leisure amenities have grown.5 More than
half of the UK’s population live in cities, and as the UK economy has become more
city focused, the popularity of cities has grown. 6 London’s population fell from
8.6 million in 1939 to 6.7 million in 1988, but this huge shift has since reversed, with
London growing 30 per cent to 8.8 million in 2016.7 In other major cities, recovery
started later, but in almost all cases population growth was stronger in the 2000s
than in the 1990s and has accelerated in the current decade.8
Unlocking growth
Enabling people to work and live in or around cities is a key way in which
infrastructure investment can support growth in every region. There are fast
growing, infrastructure constrained cities spread across the regions of the UK,9
and addressing these constraints is the greatest opportunity for infrastructure to
help each region to do better.
Most major UK cities lag behind national productivity levels. This contrasts with
large cities in many other European countries, which add to their countries’
productivity.10 Infrastructure cannot drive growth alone; other factors, especially
skills, are essential. But lack of infrastructure can inhibit growth. To sustain future
growth, transport policy must reflect the economic and structural changes that
are shaping the UK’s transport needs.
The priorities for transport investment should be growing and congested
urban areas and their catchments, the key interurban corridors, and the key
international gateways.11 There has been welcome progress on the latter two
areas in recent years. After years of delays, decisions on aviation capacity are
being made following the report of the independent Airports Commission.12
Investment in interurban corridors has increased sharply and is planned to
increase further in the 2020s. Chapter 7 sets out the Commission’s proposals
for future investment in the strategic road and rail networks, with substantial
continued investment. Chapter 3 sets out the need for future plans to respond to
the opportunities from connected and autonomous vehicles.
However, investment in urban transport outside of London continues to lag
behind.13 Urban transport networks underpin commuter journeys that create
deep labour markets, and enable people to access cultural and leisure activities.
Most urban journeys are short, relying predominantly on urban transport
networks. The average trip length for people who live in cities and towns is under
10 miles, with fewer than 5 per cent of journeys over 25 miles.14 Rail journeys tend
to be longer, but most start or end in cities.15 Infrastructure to support public
transport in growing and congested cities offers some of the highest returns for
transport investment.16
71
Investment in local and strategic transport

Intercity networks
Investment in national road and rail has been increasing, with further investment forthcoming
to improve interurban transport. Highways England is proposing to spend more than £4 billion
per year from 2020 to 2025; the government has committed around £6 billion per year for
Network Rail between 2019 and 2024; in addition, HS2 is expected to cost around £4 billion per
year on average throughout the 2020s.17 Northern Powerhouse Rail will deliver long overdue
improvements in travel times between the major cities of the North of England.
Continued focus is needed to deliver these major commitments. Sub-national transport bodies
will need to work with government on the development and delivery of these programmes and
will play an important role in ensuring that they are integrated with regional and local networks.
Local road maintenance

In recent years, insufficient funding has led to poor conditions on local roads, affecting road users
throughout the country. Six per cent of urban local A roads are considered to be in poor or very
poor condition, and 3 per cent of rural A roads.18 This creates hazards for road users, and also
increases the long term cost of maintenance. The economic case for maintenance is very strong
, since inadequate upkeep creates a risk that roads may need to be closed for emergency repairs.19
The major funding decisions for transport in the first half of the 2020s – Road Investment
Strategy 2 for Highways England, Control Period 6 for Network Rail and major projects such as
HS2 – have already been made or are shortly to be decided. They therefore fall outside the scope
of the Assessment, since the Commission’s remit states that the Commission “will not reopen
decision making processes where programmes and work have been decided (or are due to be
decided immediately after a [Commission] report is published)”.20
It is for the Department for Transport to prioritise in the early 2020s between providing the
funding needed to maintain the existing road network or to deliver the full programme of
enhancements. In the later 2020s, the Commission believes that £500 million a year of funding
should be made available for local highways authorities to address the local road maintenance
backlog probably through to the early/mid 2030s.
The Commission recommends that government should make £500 million a year of funding
available from 2025/26 to 2034/35 for local highways authorities to address the local road
maintenance backlog.
Urban transport
In growing urban areas, transport networks are coming under increasing
pressure. Cars and buses in central Manchester or Bristol experience delays of
more than 100 seconds per mile travelled.21 This compares to an average of 78
seconds on all urban A roads, 22 seconds on rural A roads and 9 seconds on
72
the intercity road network. 22 Crowding on the railway is also focused on cities,
particularly London, Manchester, Birmingham and Leeds.23
Figure 4.1 shows that the capacity of road networks to deal with peak traffic falls
with increases in the size of towns and cities, particularly in areas with populations
above 100,000. The chart uses the Commission’s newly developed measure of
how quickly people can travel from where they live in a town or city (using the
Office for National Statistics’ ‘built up areas’ definitions) to that town or city’s
centre of employment. The dataset and technical details are available on the
Commission’s website. The chart uses the ratio of peak to off-peak connectivity
for towns and cities to assess capacity constraints. A value of 1 implies that
the connectivity is the same at peak and off-peak times. Lower values imply
constraints at peak times. As settlement size increases, road networks become
increasingly less effective at managing peak demands.24
1.00
high capacity
0.95
0.90
0.85
0.80
0.75
0.70
0.65
0.60
0.55
low capacity
0.50
0 200,000 400,000 600,000 800,000 1,000,000
Figure 4.1: Built up area population and ratio of peak to off-peak connectivity
for built up areas with population under 1 million25
Making best use of limited space

More investment in public transport, alongside the promotion of safe cycling
and walking, is the only way that cities can increase their infrastructure capacity
to support growth. Connected and autonomous vehicles could have a positive
impact on intercity transport, but they will never be an effective replacement
73
for high capacity public transport in dense city centres and may simply increase
pressures on road space.26
New forms of public transport – from dockless cycle or even electric scooter
hire to autonomous buses – are emerging. City leaders need to consider how
to manage the impacts of changing travel patterns in their transport planning.
But the basic challenge of urban transport is still the same: there is simply not
enough space in cities for everyone to travel by car.
Typically new roads lead to new journeys, filling up the additional space.27 But, as
shown in figure 4.2, it is possible to increase capacity by investing in high capacity
public transport.
Transport mode Typical maximum capacity per lane

(inbound passengers per hour)
Car (1.2 people – current commuter average) 720
Bus 1,800
Bus rapid transit 2,100
Tram 2,880
Figure 4.2: Maximum system capacity for different modes of transport28

A less car focused approach to urban transport can also bring other benefits,
including:
ll the opportunity to build well designed city centres focused on
people’s needs
ll reallocating space from roads and parking to pedestrianised areas,
leisure amenities and green space
ll better, safer provision for cycling and walking
ll improved transport networks that are more accessible for older and
disabled people
ll infrastructure aligned with schemes to bring brownfield land back into
use, which can help regenerate inner cities.29
Poor air quality is also a significant cost of cities dominated by petrol and
diesel cars, and has a damaging impact on health. However, in the long term
widespread adoption of electric vehicles will reduce the harm caused by this, so
it is important that cities help to facilitate the rapid uptake of electric vehicles, as
set out in Chapter 3.
74
Improving transport in every city

Government should make sure all cities are able to deliver the appropriate
transport infrastructure in their area. This requires changes in strategy
development, funding and governance for urban infrastructure in cities
outside London.
Strategy development
Transport policy should not be about schemes. Investment needs to enable
the journeys that allow people to live and work where they want to, and to
connect people to wider services. Decision makers need to understand all the
characteristics of the local economy, environment and geography. Transport
policy needs to be integrated with a clear strategy for where housing growth can
be accommodated in and around cities, and where employment growth is likely
to occur. Linking transport enhancements to housing growth is essential to get
the most value from investment.
City leaders should implement long term plans for their city-region reflecting
their own economic and social priorities, based on their own local knowledge
and accountability. These need to integrate transport, housing and employment.
Other urban infrastructure, such as digital (see Chapter 1), electric vehicle
charging (see Chapter 3) and flood resilience (see Chapter 5) also needs to
be considered.
Recent government policy on devolution has meant cities increasingly have the
right powers and governance to tackle these issues, particularly in cities with
mayors. However, integration of strategies for transport and housing requires
integration of decision making. Currently, leaders in large cities need unanimous
approval from individual districts to all aspects of any integrated development
plan, limiting the level of ambition. This needs to be addressed to maximise the
value from new urban transport infrastructure.
Beyond this, a lack of long term funding means that, outside of London and
Manchester, few cities have developed integrated strategies, since there has
been no realistic prospect of being able to implement them. In some cities, this
has also led to a lack of strategic capacity.
Funding
Local leaders making long term plans for their cities need long term certainty
on funding. There is a lack of long term, stable and certain funding structures to
support investment in urban transport outside London. City and local leaders
have to bid to many different government competitions, which provide an
unpredictable and short term funding stream and place a significant strain on
the limited revenue funding available for transport planning.30 The government’s
recently created Transforming Cities Fund improves on previous funding
arrangements by giving mayors more flexibility over their funding allocations,
75
and simplifying requirements before funding decisions can be made. But more
progress is needed.
Local transport authorities outside London should have stable, devolved
infrastructure budgets, as Highways England and Network Rail have. The
devolved budget should comprise of five year settlements, with fixed annual
budgets set at least two years before the start of the five year period. This
budget should be sufficient to cover all maintenance, small to medium
enhancement projects and programmes to deploy or pilot new smart
infrastructure technologies.
Devolved infrastructure budgets will be a replacement for Department for
Transport and Local Growth Fund grants for local infrastructure, and they will
be complementary to the funding that authorities can raise locally through fare
income and other local revenue sources.
Maintenance allocations should be determined according to the cost of keeping
the relevant infrastructure assets held by the authority in working order.
Funding for small to medium enhancement projects in cities should be allocated
according to the size of the city, the city’s density, and evidence that the city’s
projected growth will outstrip its existing infrastructure capacity.
Increased funding for cities should be available to all cities with a population over
about 100,000 to reflect the higher infrastructure needs of denser urban areas.
This broadly matches the definition of ‘primary urban areas’ (54 cities in England
outside London).31 Whilst there is no perfect boundary, a population of around
100,000, as shown in figure 4.1, is the point at which capacity constraints become
most serious.
The level of funding for devolved infrastructure budgets in cities should
ensure their spending power increases by around 10 per cent during the 2020s
compared to current urban transport investment, an increase of approximately
£300 million per year, and increases by around 30 per cent or over £1 billion per
year by the mid 2030s. This totals around £12 billion from 2020 to 2040. Chapter 7
sets out the choices that the Commission has made within the resources set out
by the government. With large existing commitments, such as HS2, in the 2020s,
new funding for cities has to build up gradually. Funding for authorities outside
cities should remain broadly at current levels.
To ensure the long term stability of funding for cities and local authorities,
government should legislate for an obligation to publish infrastructure allocations
in advance. In the future, government should also consider whether local tax
raising may be more appropriate than central government grants.
As well as increased funding for investment, it is important that local
infrastructure authorities have the resources they need to increase their
transport capacity. Government should therefore ensure sufficient revenue
funding is available for local project development, network management and bus
operations, especially in cities.
76
Governance
The appropriate authority to make decisions on how to invest devolved urban
infrastructure funding will usually be one that already exists: a mayoral combined
authority, combined authority or unitary authority. But some cities have no
urban infrastructure authority of their own and are served by a county council. In
these cases government should ensure that arrangements are put in place for an
appropriate urban infrastructure authority.
Once funding is devolved to local authorities, central government should not
have powers over how it is spent. Cities will need to coordinate with Highways
England and Network Rail and may, in some cases, choose to use some of their
resources for enhancements to the strategic networks in partnership with them.
Local authorities should be expected to make evidence based decisions, evaluate
performance of their investments and publish information enabling them to
be held to account by local people on how they have invested in infrastructure.
Chapter 6 sets out the Commission’s proposals on how to use better data to
improve the appraisal and selection of projects. In cases of serious failure,
government could withdraw funding devolution.
The Commission recommends that cities should have the powers and
funding they need to pursue ambitious, integrated strategies for transport,
employment and housing.
ll By 2021, metro mayors and city leaders should develop and
implement long term integrated strategies for transport,
employment and housing that will support growth in their cities.
ll By 2021, government should ensure city leaders have the right
powers to deliver these integrated strategies, including the
power for metro mayors to make decisions on major housing
development sites.
ll Government should set out devolved infrastructure budgets for
individual cities for locally determined urban transport priorities
in line with the funding profile set out by the Commission. Budgets
for 2021-2026 should be confirmed by mid 2019. Government should
pass legislation, by 2020, requiring cities to be given regular five
year infrastructure budgets.
77
Infrastructure to support housing

Infrastructure needs to promote new housing and new communities in areas where they are
needed. Infrastructure alone will not solve the UK’s housing challenges, but better coordination
of infrastructure with new developments is vital if infrastructure is to be deployed effectively.
Siloed planning and delivery of utilities infrastructure and housing means that providing utilities
to new housing developments can often be a cause of delay to construction. Consultation
responses to Congestion, Capacity, Carbon: priorities for national infrastructure identified
three causes.
Firstly, there is a tension between the requirements on regulators to protect consumers from
price rises and to invest in future infrastructure provision, which can generate perverse outcomes
for the delivery of timely infrastructure. In particular there is a lack of incentive for utility
companies to develop increased capacity in advance of development, putting these costs on
housebuilders. This can create coordination failures where upgrades are large and exceed the
needs of any individual development.
Secondly, the diversity of organisations (the Distribution Network Operators, the industry
regulators, local planning authorities) involved in the planning, design and delivery of utilities
infrastructure in England leads to division and poor communication. And thirdly, there is a lack
of mechanisms to improve coordination between housing and infrastructure for smaller scale
housing developments.
The Commission will conduct more detailed analysis on the role of utilities in the delivery of
housing, working with stakeholders and liaising with ongoing studies.
The next wave of infrastructure upgrades

Substantial funding must be set aside for major upgrade programmes in the city-
regions that need them the most, in addition to the devolved funding for small to
medium enhancements. London has had the advantage of receiving exceptional
funding for upgrades to capacity such as Crossrail. Other cities should have this
benefit too. This could provide cities in the UK with major capacity upgrades such
as metros or bus rapid transit.
Major upgrade programmes require higher levels of funding to be concentrated
in a few areas temporarily, and even fast growing cities do not require
transformative upgrades on a continuous basis, meaning that a process of
prioritisation is required. Funding should be agreed for major new capacity
programmes in cities where infrastructure is the most significant constraint
on growth. Identifying programmes will take time; most cities have not
developed plans at this scale because they have lacked funding streams that
could realistically deliver them. In some cities, it will be important to build
capability in strategy, procurement and delivery before launching major
investment programmes.
78
Before funding is agreed, cities should commit to additional housing

development alongside new transport, linking employment growth to new
homes. They should also be able to demonstrate that they can provide a local
contribution to project costs, as for Crossrail 2, although the proportion may
need to vary to reflect regional circumstances.32 This contribution should include
local fundraising, potentially through fares or local taxes.
Central government should work closely with cities before making final
commitments to funding. Not everywhere will need major investment. The initial
phase should identify priority cities. Figure 4.3 illustrates how capacity constraints
and expected employment growth vary considerably between cities. This uses
the Commission’s new measure of transport connectivity (see figure 4.1)33 and
employment growth estimates34 derived from Office for National Statistics’
population projections (which roll forward data from the recent past, adjusting
for demographics, and are not forecasts).
Having identified priority cities for the first wave, government should work
with them as they develop specific project proposals to support growth. When
final proposals are submitted to government, they should also be reviewed by
the Commission. The government should then make final decisions on major
upgrade programmes and allocate funding, making long term commitments into
future spending review periods where necessary.
–5% 0% 5% 10% 15% 20 25%

0.40
High congestion, High congestion,
low employment growth high employment growth
0.45
Manchester
0.50 Liverpool
0.55
Birmingham
Solent
Nottingham Leeds
0.60 Brighton Bristol
0.65 Leicester Bournemouth

Sunderland Tyneside Sheffield
Hull
0.70 Preston
Reading
Stoke
Teesside Norwich
0.75
Derby Coventry
0.80
0.85 Low congestion, Low congestion,

Milton Keynes
low employment growth high employment growth
0.90
Figure 4.3: Capacity contraints on the roads and employment growth

projections for 2018-50 within city centres outside London, based on
Commission analysis.
Note: The 25 largest cities by employment are shown in orange, with smaller cities in grey. Cities further to
the right are projected to grow faster in their city centre, while cities nearer to the top have greater capacity
constraints into the city centre.35
Not all cities will need large scale investments. In some, existing capacity and
incremental enhancements will be sufficient. Others that are not included in
the first wave should be considered for inclusion in future rounds of funding,
especially where lower cost interventions, such as bus schemes, have identified
demand in key transport corridors. Given the long term funding being proposed
79
(major capacity programmes could easily need to be funded for 5-10 years)
future rounds should take place no more than once or twice per parliament. It is
essential that the process makes choices about the most important investments
rather than giving many small funding grants. Around £31 billion is required by
2040 for major urban transport capacity programmes, delivering on growth
needs over that period and preparing for future growth.
The Commission recommends that government should allocate significant
long term funding for major capacity upgrades in selected growth priority
cities, in line with the funding profile set out by the Commission. Cities
benefiting from major projects should make commitments on housing delivery
and provide at least 25 per cent of funding. Priority cities should be identified
by mid 2019, with long term investment commitments agreed by 2020. Future
rounds should take place no more than twice a parliament.
London
Development of regional cities should be in addition to and not instead of
continuing to invest in London. The UK’s highest value jobs continue to be in
London and it is projected to grow faster than anywhere else, with employment
growing 18 per cent to 6.7 million by 2041.36 Taxes paid in London and its
surrounding regions fund infrastructure and other services in other regions of
the UK, contributing £3,070 per person to the rest of the UK in 2016.37,38 And it is
an internationally competitive city; infrastructure constraints on London’s growth
are as likely to cause displacement overseas as they are to elsewhere in the UK.
London’s transport networks are already more congested and overcrowded
than anywhere else in the country. Future growth will not be possible without
substantial increases in capacity. The Commission has already recommended
that Crossrail 2 should go ahead to increase capacity into central London. The
Mayor’s Transport Strategy sets out a wider range of interventions that will be
needed, including improvements to bus networks, cycling infrastructure, the
Underground and suburban rail lines.39
Most of the proposals contained in the Mayor’s Transport Strategy would be
delivered by Transport for London. Transport for London plans to cover all its
operational expenditure through its own operational income in future, but it will
still need support for investment, which should be sustained at current levels.
The government should continue to work with the Mayor to fund Crossrail 2 as
recommended by the Commission.
80
Endnotes
1
Eurostat (2018), Gross value added at basic prices by NUTS 3 regions; Eurostat (2018) Employment (thousand persons) by NUTS 3 regions; ONS (2018)
Annual population survey – workplace analysis (accessed through Nomis)
2
There is no single UK definition of a city. Except where stated otherwise, this chapter uses the “primary urban area” definition originally developed for
the State of the English Cities reports (Office of the Deputy Prime Minister, 2006 and Department for Communities and Local Government, 2011) and
updated by the Centre for Cities in 2016, corresponding to cities with a population of around 110,000 or over. Under this definition there are 55 cities in
England.
3
National Infrastructure Commission (2017), Economic growth and demand for infrastructure services
4
Centre for Cities (2018), Cities Outlook 2018
5
Martin et al. (2016) Future of Cities: Working Paper. Divergent cities in post-industrial Britain, report prepared for Foresight, Government Office for
Science
6
Centre for Cities (2018), Cities Outlook 2018
7
London Datastore (2015), Population Change 1939-2015; ONS (2017), Population estimates (accessed from Nomis)
8
National Infrastructure Commission (2016), The impact of population change and demography on future infrastructure demand
9
See figure 4.3
10
Centre for Cities (2016), Competing with the continent, how UK cities compare with their European counterparts
11
Eddington (2006), The Eddington transport study, the case for action: Sir Rod Eddington’s advice to government
12
Airports Commission (2015), Final report
13
Commission calculations based on: Ministry of Housing, Communities and Local Government (2017), Local authority capital expenditure, receipts and
financing; HM Treasury (2018), Central government own capital expenditure on services by sub-function (data provided to the Commission)
14
Department for Transport (2016), National Travel Survey Table NTS9911, average number of trips by trip length, region and rural-urban classification,
England, 2014/15
15
Department for Transport (2017), Rail factsheet: 2017
16
Eddington (2006), The Eddington transport study: the case for action: Sir Rod Eddington’s advice to government; Department for Transport (2016),
Value for money assessment for the integrated transport block
17
See figure 7.1
18
TRL (2017/18), Carriageway Condition Index (CCI), sourced from national SCANNER data
19
Department for Transport (2015), Road investment strategy, economic analysis of the investment plan; Urban Transport Group (2015), A bumpy ride
20
HM Treasury and National Infrastructure Commission (2017), National Infrastructure Commission framework document
21
Department for Transport (2017), Average speed on local A roads (CGN0502); Department for Transport (2018), Average speed, delay and reliability of
travel times on the SRN (CGN0402)
22
Department for Transport (2018), Travel time measures for the Strategic Road Network and local ‘A’ roads: January to December 2017
23
Department for Transport (2017), Rail passenger numbers and crowding on weekdays in major cities in England and Wales: 2015 (revised)
24
The chart shows settlements with population size up to 1 million. Larger settlements show the same pattern, but are hard to show on the same chart
without distortion, since their population is so much greater. Values for the ratio of peak to off-peak connectivity are: Greater London 0.24, Greater
Manchester, 0.46, West Midlands, 0.56, West Yorkshire 0.59.
25
Prospective (2018) Transport connectivity final report, report for the National Infrastucture Commission
26
Wadud et al (2016), Help or Hindrance? The travel, energy and carbon impacts of highly automated vehicles, Transportation Research
27
Duranton and Turner (2011) The fundamental law of road congestion
28
Steer Davies Gleave (2018), Urban transport network review, report for the National Infrastructure Commission
29
Urban Transport Group (2018), Active Travel: solutions for changing cities; Mayor of London (2017), Healthy Streets for London; Centre for Cities (2014),
Delivering change: building homes where we need them
30
Urban Transport Group (2016), Policy Futures for Urban Transport
31
Centre for Cities (2018), City Definition, www.centreforcities.org/puas
32
National Infrastructure Commission (2016), Transport for a World City
33
34
Lomax and Smith (2018), Effect of capacity constraints on population and employment distribution, report for the National Infrastructure Commission
35
Lomax and Smith (2018), Effect of capacity constraints on population and employment distribution, report for the National Infrastructure Commission;
36
Transport for London (2017), Mayor’s Transport Strategy: supporting evidence challenges & opportunities
37
Office for National Statistics (2017), The wealth of regions – measuring the UK’s tax and spending imbalance
38
Office for National Statistics (2017), Country and regional public sector finances: Financial year ending March 2016
39
Mayor of London (2018), Mayor’s Transport Strategy
81
82
5. REDUCING THE RISKS

OF DROUGHT AND
FLOODING
83
BEING RESILIENT TO
EXTREME WEATHER
Climate change increases the risk of both
flooding and drought in England
This is already having an impact,
and will do in the future:
High flood risk: But also a strong

1 million risk of drought:
homes have more
than 1% chance of
flooding in any
given year
1in 4
chance of a
severe drought
between now
and 2050
RESILIENCE SAVES PEOPLE FROM THE TRAUMA OF FLOODING

AND THE COSTS OF DAMAGE AND INSURANCE
The Commission have

proposed a national
standard so that by
2050 communities will
be resilient to flooding This means that someone
99.5%
of the time
living in a house at risk of
flooding for 20 years
would face only a 1 in 10
chance of flooding over
wherever feasible that time
Sources: Commission calculation using inputs from Atkins, Environment Agency, ITRC and Regulatory Economics
84
BUT WE ALSO NEED TO BE MORE RESILIENT TO DROUGHT

Relying on emergency measures The UK needs an extra
4,000Ml
would cost an estimated
£40 billion of water a day to assure

long-term supply
Over the next 30 years – being
resilient would cost only £21 billion
emergency cost £40 bn
resilience cost £21 bn
A national standard of
flood resilience with a A national water transfer
higher standard in major network and new water
urban areas supply, such as reservoirs
Nationwide, Halving leakage by 2050

catchment-based plans and reducing demand
combining green and grey through efficiency and
infrastructure smart metering
Sources: Commission calculation using inputs from Atkins, Environment Agency, ITRC and Regulatory Economics
85
Climate change will increase the risk of both flooding and

drought. Despite several significant incidents over recent
years, the risks continue to rise, and planning has been
disjointed. Action is needed now to make communities
resilient for the future, rather than waiting until the
situation gets worse.
About 5 million properties in England are currently identified to be at risk of
flooding. Of these, about 600,000 homes have more than a 1 per cent chance
each year of being flooded by rivers and the sea.1 A similar number have more
than a 1 percent chance each year of flooding from surface water.2 Floods affect
people’s lives and health as well as causing economic damage.
While it will never be possible to prevent all flooding, the current approach
is too piecemeal and too reactive. Government should ensure that all
communities are resilient, so they are able to cope with, and recover from,
flooding. There should be a long term national programme: resilience cannot
be increased everywhere overnight and the extra funding needed will only
become available gradually. But a long term strategy, with long term funding,
can deliver a national standard by 2050.
At the same time, households and businesses in large and densely populated
parts of England face significant risk of having their water supplies rationed
because of drought. While water companies’ plans show some progress in
addressing this risk, they fall short of what is needed. The Commission’s 2018
report Preparing for a drier future: England’s water infrastructure needs3 set
out the action needed for drought resilience.
To minimise the impact of severe weather and climate change, England
requires:
ll a long term strategy to ensure that all communities are resilient to
severe flood events by 2050, with higher standards for the most
densely populated areas
ll increased resilience to drought through a national water network,
halving the water lost through leaks, and reducing demand through
smart metering
A lack of reliable data has meant that it has not been possible to consider
surface or waste water in detail for this Assessment. Surface water flooding
is significant4 and there has been little progress in the decade since the Pitt
review.5 Further work is needed urgently.
86
The risk of flooding

Climate change is expected to both increase rainfall in winter and decrease it in
summer, as shown in figure 5.1. Together with population growth, this will lead to
greater risks of both flooding and drought.
Summer decrease Winter increase
-19% 11% East Midlands
-17% 13% East of England
-20% 17% London
-19% 16% North East England
-18% 13% North West England
-15% 11% South East England
-19% 14% South West England
-17% 14% West Midlands
-16% 14% Yorkshire & Humber
-20% 0% 20%
Figure 5.1 Projected changes in summer and winter precipitation by 20506

Note: changes for 50% probability in the 2050s assuming medium emission scenario.
The likelihood of drought and flooding is expressed as an annual probability. For

example, a 1 per cent annual probability of flooding corresponds to a 1 in 100
chance of a particular area being affected each year. As there are many areas at
risk of flooding across England, there is a high chance that at least one will be
flooded by a 1 per cent event in any year. Probabilities can only be an estimate:
in particular, the uncertain impacts of climate change limit the ability to forecast
future risk precisely. Care should be taken in interpreting specific figures, but
scenarios allow a broad assessment of plausible future flood risk. Further details
and references to the assumptions and analysis are in the technical annexes:
Flood modelling and Analysis of drought resilience.
Increasing numbers of households across England are at risk of flooding in severe
events (shown in figure 5.2), but long term objectives for flood risk management
are unclear. Levels of risk and investments vary widely across otherwise similar
places and there is no certainty of whether or when preventative action will
be taken.
87
Figure 5.2 Percentage increase in homes at 0.5 per cent or greater annual
chance of flooding in future population and climate change scenarios7
Flooding has significant impacts on the local community including disruption,

loss of employment, and mental ill health as well as direct impacts on buildings
and property.8 Insurance can help, and is currently subsidised for homes at most
risk, but only covers some of the impacts.
A national standard of flood resilience

Management of flood risk over recent years has too often been short term and
reactive. In the past, government budgets for flood risk management have
been reduced, only to be increased again after floods: budgets were reduced in
2006/7 and 2007/8 but then increased following floods in 2007, and cut again in
2011/12 with a large increase following floods in the winter of 2013/14.9 It would
clearly be better to build flood resilience before it is needed. The six year capital
programme agreed for 2015/16 – 2020/21 provides greater certainty and should
result in more efficient planning. However, there is no clear long term objective
for the level of flood resilience that the government is seeking to achieve.
Decisions about capital investment in flood risk management have generally been
made on the basis of cost benefit analysis. Essentially, this involves an assessment
of whether it is ‘worth’ protecting particular homes and commercial properties.
This is not a sustainable basis for decision making. Properties at risk of flooding
are seldom abandoned or adapted to cope with the risk, so people are left to live
with the risk. Subsidised insurance can incentivise homeowners in flood risk areas
not to take any action. Without a clear objective, it is harder for the Environment
Agency to take a strategic view across a whole catchment, although some
catchment based plans have been made.
A better approach would be to set a nationwide objective for a minimum level
of resilience wherever feasible. This has public support: the Commission’s social
research showed that 59 per cent of people thought everyone should receive the
88
same level of protection, even though in some areas it would cost more, with only
16 per cent against.10 However, a national standard should not be statutory or
imply a right to compensation if not achieved.
Setting a standard
There is no absolute way of setting the right standard. What is affordable and
achievable will vary over time. The Commission has considered what standards
would be reasonable by 2050. Over longer time periods, higher standards might
be achievable.
The Commission has analysed the investment that would be required to provide
a range of resilience standards across different settlement types for river and
sea flooding. Average annual capital costs between 2020 and 2050 are shown
in figure 5.3, based on a climate change scenario equivalent to a 2oC increase in
global mean temperatures.
The costs were estimated using recent Environment Agency data on flood risk
management activities. The modelled cost per property varies depending on
the property’s current and future risk, whether it benefits from existing flood
defences, property density and source of flooding.11 The baseline assumes that
current resilience is maintained, broadly following the Environment Agency’s
Long Term Investment Scenarios.12 Further details are in the technical annex:
Flood modelling.
The modelling produces estimates of the costs of a national standard of resilience
to flooding with 1 per cent, 0.5 per cent or 0.1 per cent annual probability,
and additional costs for providing higher standards in the most densely
populated areas.
£1.4bn
£1.2bn
Average annual capital cost 2020-50
£1.0bn
£0.8bn
£0.6bn
£0.4bn
£0.2bn
£0.0bn
Maintain 0.1% in 1% 0.1% in 0.5% 0.1% in 0.1% in urban 0.1%
resilience major cities, resilience major cities, resilience major cities, areas, resilience
maintain 1% resilience 0.5% resilience 1% resilience everywhere
elsewhere elsewhere elsewhere elsewhere
Figure 5.3 Estimated average annual public capital costs for different standards
of resilience to flooding from rivers and the sea, 2oC increase in global mean
temperatures climate scenario, 2017 prices, in England
89
The annual ongoing cost of a particular standard can be compared to the

estimated avoided damage, including property damages, emergency response
costs, risk to life and physical injury, mental health effects and impacts on
infrastructure, transport, schools and leisure. Setting a national standard will
ensure that society as a whole is better off, but without requiring that each home
or commercial property justifies its level of flood resilience.
Whilst the estimated costs of nationwide flood resilience are up to three times
current investment, the benefits (reduced damages) exceed costs for the range
of standards. Estimates are inevitably uncertain; climate change means weather
patterns, and therefore the scale of impacts, may fall outside the range of
available data.
The Commission’s judgement is that all properties, wherever feasible, should
be resilient to severe flooding, with a 0.5 per cent annual probability, by 2050.
This is consistent with the advice provided to government by the Natural Capital
Committee for the 25 year Environment Plan.13 Under this standard, someone
living in a house at risk of flooding for 20 years would face less than a 1 in 10
residual chance of being flooded.
Densely populated areas

A higher standard should be provided for the largest cities, with populations over
half a million. This reflects the lower cost per property for protecting densely
populated areas14 and the potential for natural disasters in cities to result in
cascading failures, putting severe pressures on disaster response. The largest
cities provide a range of economic and social services to their region as a whole,
not just to those who live within them, so the potential impact of flooding
is greater.
Precise estimates of probability for extreme events are hard to obtain.
Economically important locations should be stress tested against a range of
plausible extreme events. The Thames Barrier was designed for sea levels with
an annual probability of 0.1 per cent. The Commission’s analysis has assumed the
same standard for the largest cities.
Climate change scenarios

The Commission undertook similar analysis for a climate change scenario
equivalent to a 4oC increase in global mean temperatures. The costs of achieving
each resilience standard in a 4oC world are much higher than for the same
standard in a 2oC world, but so are the benefits.
This might suggest a precautionary approach of building resilience against higher
climate change. However, flood resilience can be designed to be enhanced
incrementally. Measures that provide resilence in a 2°C world can be upgraded if
it becomes apparent that a 4°C world is more likely. This ‘adaptive management’
is consistent with catchment based approaches using a range of interventions,
rather than just conventional flood defences. This is the most appropriate
90
approach until there is more certainty on climate change impacts, allowing

resilience standards to be increased over time.
The Commission recommends that government should set out a strategy
to deliver a nationwide standard of resilience to flooding with an annual
likelihood of 0.5 per cent by 2050 where this is feasible. A higher standard of
0.1 per cent should be provided for densely populated areas where the costs
per household are lower.
A long term strategy for flood resilience

A clear objective will allow for a long term, national strategy for flood resilience.
The Environment Agency are due to update their National Flood and Coastal
Erosion Risk Management Strategy in 2019. This should expand on the 25 Year
Environment Plan to set out how these standards of flood resilience can be
achieved by 2050.
Delivering the strategy will require action on long term funding, updated
catchment and shoreline management plans, surface water management and
development control. Environment Agency monitoring of the strategy should
include data on the number, locations and resilience of properties flooded from
different sources and events each year.15
The strategy should set out a clear plan to deliver the proposed resilience by
2050, as well as ensuring that different aspects of flood management are joined
up. It should make clear what is expected of different stakeholders and maximise
the opportunities for partnership working. This should be backed up by a long
term funding commitment, building on the existing six year capital programme,
enabling efficient planning and delivery of projects to address the risk from all
sources of flooding.
Catchment and shoreline plans

Existing Catchment Flood Management Plans and Shoreline Management Plans
should be updated to take account of the new standard and set out long term
plans for flood risk management across catchments and coastal cells. These plans
should use the latest evidence to evaluate the full range of options to achieve
the proposed resilience standard including traditional flood defences, ‘green
infrastructure’ (whether natural flood management or sustainable drainage
systems), individual property measures, spatial planning and coastal realignment
or ‘managed retreat.’ They will need to take account of the replacement of the
Common Agricultural Policy following the UK’s exit from the EU which should
support natural flood management. As risk can never be eliminated, flood
warning, response and recovery will also continue to be important.
The plans will need to show how risk can be managed for all plausible climate
futures. They should ensure interventions are adaptable to different futures
and that climate change is factored into the design and construction of all
91
infrastructure. This should be undertaken in such a way that the plans can
be updated to reflect new information on climate change with the minimum
of effort.
Surface water management

The data needed to robustly assess the costs and benefits of different
resilience standards for surface water flooding is currently unavailable. All
relevant organisations should ensure data is available in good time for the
next Assessment. Water companies are developing Drainage and Wastewater
Management Plans. Water companies and local authorities should work together
to build on their existing plans and take action on local flood risk where this
is possible. This should include identifying communities at greatest risk from
severe surface water flooding and developing joint plans, including investment
requirements, to ensure resilience. These plans should inform the next Price
Review and Assessment.
Development control
Preventing inappropriate housing development is essential for effective long
term flood risk management. In 2016/17, 11 per cent of new homes were built in
the floodplain16 and while many will have been designed to minimise the risk,
long term sustainability and compliance is difficult to demonstrate. Consideration
should also be given to development outside the floodplain which could increase
risk, for example through increased surface water runoff.
The Commission recommends that, to deliver the strategy:
ll By the end of 2019, government should put in place a rolling 6 year
funding programme in line with the funding profile set out by the
Commission. This should enable efficient planning and delivery of
projects and address the risks from all sources of flooding.
ll The Environment Agency should update plans for all catchments
and coastal cells in England before the end of 2023. These should
identify how risk can be managed most effectively using a
combination of measures including green and grey infrastructure,
spatial planning and property level measures.
ll Water companies and local authorities should work together to
publish joint plans to manage surface water flood risk by 2022.
ll The Ministry of Housing, Communities and Local Government
and planning authorities should ensure that from 2019 all new
development is resilient to flooding with an annual likelihood of
0.5 per cent for its lifetime and does not increase risk elsewhere.
92
Drought resilience
A reliable water supply is usually taken for granted in the UK. But the country
faces a real and growing risk of water shortages, especially in the south east of
England. Climate change, an increasing population, and the need to protect the
environment are bringing further challenges for an already strained system. And
the pressure will only rise over the coming decades as shown in figure 5.4.
Worst historic drought Severe drought Extreme drought
Low population,
medium climate
Additional capacity
needed (Ml/day)
> 500
500 – 1,000
1,000 – 1,500
1,500 – 2,000
2,000 – 2,500
High population,
high climate
Figure 5.4 Additional water capacity for droughts with different population and
climate scenarios17
Note: medium climate refers to an average medium emission scenario, high climate refers to a drier, medium
emissions scenario with less water in the south east.
The full analysis is shown in the Commission’s report Preparing for a drier future
and the technical annex: Analysis of drought resilience. Conflicting incentives,
limited cooperation between water companies and a short term focus have
constrained action. As a result a serious drought would lead to an unacceptably
high risk of severe supply limitations; homes and businesses could even be
completely cut off.
Maintaining current levels of resilience until 2050 in the face of rising population,
environmental and climate pressures, would require additional capacity of about
2,700-3,000 million litres per day (Ml/day) in England.18 Additional capacity
required to protect the UK from extreme drought (0.2 per cent annual chance)
is between 3,500 and 4,000Ml/day as shown in figure 5.5.19 The Commission’s
analysis shows that the costs of providing proactive long term resilience are less
than those for relying on emergency response.
The Commission therefore believes that additional supply and demand reduction
totalling 4,000Ml/day should be delivered by 2050.
93
45 4,500
40 4,000
35 3,500
Water need (MI/day)

30 3,000
Costs (£ billion)
25 2,500
20 2,000
15 1,500
10 1,000
5 500
0 0
Severe Drought – Low Extreme Drought – Low Severe Drought – High Extreme Drought – High
population and medium population and medium population and high population and high
climate climate climate climate
Costs of providing proactive, long term resilience

Costs to maintain the current level of resilience and respond to an emergency
Water need (right axis)
Figure 5.5 Costs of providing proactive, long term resilience and relying on
emergency response for droughts beyond current resilience levels20
Note: Costs are expected present values to 2050 (in 2018 prices) and include maintaining 1 per cent
resilience, which is considered to be ‘business as usual’.
A ‘twin-track’ approach of reducing demand and increasing supply is the lowest

cost and most sustainable way to increase resilience. And more ambitious long
term plans are needed, as shown in figure 5.6. These should address leakage,
enable water companies to undertake more comprehensive water metering and
demand management, and ensure the delivery of a national water network, and
other options for additional supply infrastructure.
94
Recommendation
Maintaining the
existing level of
resilience
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Additional capacity (Million litres per day)
Leakage reduction Efficiency and metering Supply infrastructure
Figure 5.6 Twin-track approach addressing demand and supply21
Supply
Even with ambitious action to reduce demand, more supply infrastructure will be
needed. Aiming for additional capacity of 4,000Ml/day will require a minimum
of 1,300Ml/day additional supply infrastructure.22 Different options are available,
including transfers, reservoirs, reuse and desalination. A range of studies have
all found a positive cost benefit case for greater transfers and water trading.23
A network of strategic water transfers, which can move water from areas with
a surplus to those where it is needed, could provide about 700Ml/day more
capacity at comparable cost to other options and with increased adaptability of
the overall system.24 The remaining capacity should be provided by the most cost
effective combination of supply infrastructure.
The scale of this infrastructure goes well beyond that seen in the draft plans
proposed by water companies. It is likely to need strengthened regional
approaches and an independent national framework. Ofwat has developed a
‘direct procurement’ mechanism for large infrastructure projects which could
form the basis of open and transparent competition ensuring all options for
significant additional supply capacity can be considered.
Demand
Demand reduction, including addressing leakage, can deliver the remaining
2,700Ml/day needed. Today, around 2,900Ml/day (20 per cent) of water put
into the public supply is lost through leakage.25 An ambitious long term strategy
to reduce leakage would encourage action by customers and incentivise
technological innovation, which should drive down the costs of managing leaks.
Halving leakage should save over 1,400Ml/day by 2050.
95
Conventional metering can reduce demand by around 15 per cent and smart
meters are expected to reduce this further (to about 17 per cent) and help identify
leaks.26 Water companies can introduce compulsory water metering in water
stressed areas. About 50 per cent of homes in England are currently metered
and this is expected to reach around 80 per cent by 2050, saving around 400Ml/
day. Bringing forward metering more quickly would result in a further 400Ml/day
reduction in demand by 2050. In addition, efficiency improvements (as washing
machines and toilets use less water, for example) are expected to reduce demand
by around 600Ml/day. There might be potential to go further in increasing
efficiency, for example through local reuse schemes or labelling appliances, and
companies should be more ambitious and show what can be achieved.
The Commission recommends that government should ensure that plans are in
place to deliver additional supply and demand reduction of at least
4,000Ml/day. Action to deliver this twin-track approach should start
immediately:
ll Ofwat should launch a competitive process by the end of 2019,
complementing the Price Review, so that at least 1,300Ml/day is
provided through (i) a national water network and (ii) additional
supply infrastructure by the 2030s.
ll The Department for Environment, Food and Rural Affairs should set
an objective for the water industry to halve leakage by 2050, with
Ofwat agreeing 5 year commitments for each company (as part of
the regulatory cycle) and reporting on progress.
ll The Department for Environment, Food and Rural Affairs should
enable companies to implement compulsory metering by the 2030s
beyond water stressed areas, by amending regulations before the
end of 2019 and requiring all companies to consider systematic
roll out of smart meters as a first step in a concerted campaign to
improve water efficiency.
Joining up flood and water management

A healthy aquatic environment is important for water supply and flood
management as well as for biodiversity. Interventions to improve flood and
drought resilience should consider the range of interactions that water has with
people and the environment. There are opportunities for green infrastructure
approaches that deliver multiple benefits including groundwater recharge, water
quality and flood risk management.
The Environment Agency, local authorities and water companies should all work
together to better coordinate their plans. The Environment Agency has a key role
through its strategic overview for all flood and coastal erosion risk management
as well as regulatory responsibility for water quality and abstraction. Appraisal and
funding should encourage interventions that improve both drought and flood
96
resilience. Decisions on flood and water infrastructure should take into account
the full range of potential benefits as well as wider impacts to ensure that all
objectives can be delivered effectively.
97
Endnotes
1
National Audit Office (2014), Strategic flood risk management and Environment Agency (2018), Risk of flooding from
rivers and sea – key summary information
2
Environment Agency (2014), Flood and coastal erosion risk managment: Long-term investment scenarios
3
National Infrastructure Commission (2018), Preparing for a drier future: England’s water infrastructure needs
4
Pitt (2008), Learning lessons from the 2007 floods.
5
Committee on Climate Change (2017), Progress in preparing for climate change
6
Met Office (2014), UK Climate Projections: Medium emission scenario
7
Commission calculations using input from Sayers and Partners and JBA Consulting, for more details see technical annex:
Flood modelling
8
Public Health England (2017), The English National Study for Flooding and Health: First year report
9
DEFRA (2017), Funding for flood and coastal erosion risk management in England
10
Ipsos MORI (2018), National Infrastructure Commission Phase 2: public research
11
Sayers and Partners and JBA Consulting for the National Infrastructure Commission (2018), Floods standard of
protections and risk management activities
12
This is the same baseline assumed for the Committee on Climate Change (2017), UK Climate Change Risk Assessment
2017 Evidence Report
13
Natural Capital Committee (2017), Advice to Government on the 25 Year Environment Plan
14
Sayers and Partners and JBA Consulting for the National Infrastructure Commission (2018), Floods standard of
protections and risk management activities
15
Section 18 of the Flood and Water Management Act (2010), requires the Environment Agency to report to the Minister
about flood and coastal erosion risk management, including the application of the national strategy
16
Ministry of Housing, Communities & Local Government (2018), Land Use Change Statistics in England: 2016-17
17
Commission calculations, based on data from Water UK, water companies and the Environment Agency and using the
NISMOD model developed by the Infrastructure Transitions Research Consortium
18
To put this in context, the typical volume of water available to supply households and businesses averages 15,000 Ml
each day
19
This represents the need beyond intra-company transfers and small interventions needed to maintain existing capacity
20
Commission calculations and analysis, using input from Atkins, Infrastructure Transitions Research Consortium and
Regulatory Economics. See technical annex: Analysis of drought resilience for more details and references
21
Commission analysis, using input from Infrastructure Transitions Research Consortium and Regulatory Economics, see
technical annex for more details and references
22
This represents the need beyond intra-company transfers and small interventions needed to maintain existing capacity
23
Deloitte (2015), Water trading – scope, benefits and options; Cave (2009), Independent Review of Competition and
Innovation in Water Markets; Ofwat (2010), A study on the potential benefits of upstream markets in the water sector in
England and Wales; Ernst and Young (2011), Changing course through water trading
24
However, there are also risks; for example, transfers can enable invasive species and pathogens to spread, so options
need to be considered on a case by case basis
25
26
Based on expert consultation, and averaging values in literature including Sonderlund et al. (2014), Using Smart Meters
for Household Water Consumption Feedback, Procedia Engineering 89, 990 – 997; Ornaghi and Tonin, The Effects of
the Universal Metering Programme on Water Consumption, Welfare and Equity; evidence provided by Thames Water,
Anglian Water and Severn Trent water. See also the technical annex Analysis of drought resilience
98
6. CHOOSING
AND DESIGNING
INFRASTRUCTURE
99
The UK needs to have confidence in its decision making

and its ability to deliver innovative, world-leading, well
designed infrastructure projects. It must make effective
and timely decisions, and prioritise getting the best value
out of its infrastructure projects over their lifetime.
The Commission was established to address many serious weaknesses in
infrastructure decision-making. Policy uncertainty, reversals and prevarication
have driven up costs and hampered delivery, with short term considerations
often leading to decisions on controversial projects being postponed or,
alternatively, taken in a rush without considering the evidence.
Better decisions can be taken. Part of this is to improve the processes by which
individual projects are assessed and designed. This requires:
ll improving project appraisal by collecting better data on outturn
costs and benefits of major infrastructure projects
ll ensuring quality design in future nationally significant infrastructure
projects
ll developing a clear framework for measuring infrastructure
performance.
Delivery of high quality infrastructure also depends on the availability of
the right skills, the approach to construction and project management,
the depth of the supply base, and the capability of government and other
infrastructure owners and operators to procure and act as an intelligent client
for infrastructure. The UK’s exit from the EU will impact the UK’s skills base
and supply chain; there should be a strategic approach to manage this. These
areas are the remit of the Infrastructure and Projects Authority, rather than the
Commission. Therefore, they are not covered in this chapter, but they remain
critical.
Choosing projects
Government needs a robust approach to assessing the costs and benefits of
infrastructure projects. Cost benefit analysis (also known as economic appraisal)
is widely used to assist in deciding between infrastructure projects in the public
sector, especially for transport projects. The UK is generally thought to be a
leader in cost benefit analysis.1 The Commission has engaged with a range of
experts and interested stakeholders over the past year to better understand the
limitations of existing methods and assess where improvements could be made.2
Issues include:
ll capturing system wide effects, rather than simply the marginal impact
of individual projects
100
ll the treatment of uncertainty – too often a single number is presented

which does not reflect the range of possible outcomes
ll ensuring the process does not become overly precise and focused on
a preferred option at too early a stage.
Improving data
These are not straightforward issues to address. The Commission intends to
continue working with experts and interested parties to find solutions. One
key area where immediate progress could be made is in addressing the lack of
consistent and publicly available outturn data on the costs and performance of
infrastructure projects. In many cases, considerable time and energy is devoted
to estimating expected costs and benefits but very little on establishing actual
costs and benefits when projects are built.
Better data would allow:
ll decision makers to understand the range of uncertainty in project
appraisals by showing how outcomes have varied for similar projects,
mitigating the natural tendency to optimism in assessing costs and
benefits3
ll consideration of a wider range of approaches at an early stage, by
highlighting historic examples of successful alternatives to decision
makers
ll simplification of the early stages of appraisal, basing initial estimates
on results from comparable projects
ll greater scrutiny of proposals, at a stage when decisions are still open
ll a more balanced understanding of past success and failure, in place of
an excessive focus on the best or worst cases
ll a better understanding of how different procurement and financing
models affect outcomes (see Chapter 7).
The Commission’s technology study, Data for the public good, identified the
potential economic benefits from collecting and sharing infrastructure data. It
recommended that the Infrastructure Client Group should cultivate a shift towards
minimum levels of commercial confidentiality in the infrastructure industry.
Highways England routinely publish outturn project evaluations of major
investments. This system has led to more accurate estimates of the likely costs
of future projects, reducing the average error in forecast costs by 20 per cent
between 2000 and 2009.4 Other public bodies could adopt a similar approach.
Historic outturn costs and performance data from major projects, which are
appraised individually to a high level of detail, will be of greatest value. The
101
inclusion of historic data is vital to ensure that these datasets can inform decision
making. Data should be reported on at least projects with a whole life cost above:
ll £10 million for flood management
ll £100 million for roads
ll £500 million for rail
Cost data should be routinely comparable between initial estimates and actual
outturns. Similarly, direct measures of benefit, such as whether passenger
numbers meet expectations, should be straightforward to compare. More
complex impacts, such as those on GDP or natural capital, can be hard to separate
out from other background changes. But this should not be an excuse for failing
to publish simpler measures.
Commercial considerations are sometimes stated as a reason for non disclosure
but these can be overblown: projects which go wrong are scrutinised in public, so
it is only success stories which are not available.
Full evaluation should more often be undertaken to estimate impacts. In many
areas, very few robust evaluations exist. For example, the What Works Centre
for Local Economic Growth has only identified two high quality evaluations
worldwide of the economic impacts of high speed rail and none for trams or
cycling schemes.5
The Commission recommends that government should publish good quality
data on infrastructure costs and performance. All public bodies taking
decisions on strategic economic infrastructure should publish the forecast
costs and benefits of their major infrastructure projects at each appraisal stage
and at a suitable point after completion, by the end of 2019. The Infrastructure
and Projects Authority should work with departments to ensure that costs are
comparable between sectors.
The value of good design

Once a decision is taken, infrastructure needs to be designed and built well. This
Assessment demonstrates the need for investment in the nation’s infrastructure,
and the Commission is committed to ensuring this is of the highest quality. Now
is the time to embed design into the culture of infrastructure planning, saving
money, reducing risk, adding value, supporting environmental net gain and
creating a legacy that looks good and works well.
Design Task Force

In February 2018, the Commission announced a Design Task Force chaired by
Commissioner Professor Sadie Morgan, to advise on how best to ensure quality
design in future major infrastructure.6
102
The Task Force has concluded that achieving the Commission’s design ambitions
requires two things: advocacy for design at the highest level within projects and
access to design expertise. Major projects, including HS2 and Crossrail already do
this, embedding design in the procurement and delivery process. This approach
should be adopted for all Nationally Significant Infrastructure Projects (as defined
within the Planning Act 2008) and those which require Parliamentary approval.
Similar arrangements should be encouraged for all other infrastructure projects.
The approach could also be amplified in the Government’s National Policy
Statements for infrastructure.
A new independent National Infrastructure Design Group, to be established by
the Commission, will develop infrastructure design principles to guide design
panels, which will be published in 2019. This group will also act as a champion of
design quality in the nation’s infrastructure, by:
ll promoting new national infrastructure design principles
ll commissioning and publishing research to promote continuous
improvement in infrastructure design quality
ll providing inspiration and intelligence on good infrastructure design
ll promoting and supporting public debate on infrastructure design.
The Commission recommends that government should be embedded into

the culture of infrastructure planning, to save money, reduce risk, add value,
support environmental net gain and create a legacy that looks good and works
well, by:
ll Government ensuring that all Nationally Significant Infrastructure
Projects, including those authorised through hybrid parliamentary
bills, have a board level design champion and use a design panel to
maximise the value provided by the infrastructure.
ll Design panels for nationally significant infrastructure projects
having regard to design principles to be published by the National
Infrastructure Commission based on advice received from the
national infrastructure design group.
Smart, resilient design

Smart capability and resilience should form an important part of the infrastructure
design process.
New data capture and processing technologies such as sensors, artificial
intelligence and digital twins can generate better quality data about
infrastructure, and be used to improve the way that infrastructure is planned and
maintained. They can help to optimise networks, prevent failures, and better
target maintenance and renewals. The Commission set out recommendations in
103
Data for the public good to support infrastructure becoming increasingly smart.
All new projects should consider data collection and use at the design stages.
Resilience is also a key dimension in the design and management of
infrastructure, including adaption to climate change. Resilience needs to be
considered both at the level of individual projects and at the level of wider
systems. Individually small scale failures can multiply up in complex systems to far
more serious impacts.7
The Commission recognised in its initial consultation on process and
methodology that, given the breadth and complexity of resilience, it would not
be possible to consider the issue fully in this first Assessment.8 The Commission
intends to carry out a more in-depth analysis of resilience as a theme, working
with key stakeholders, to inform a future approach ahead of the next Assessment.
Measuring infrastructure performance

Measuring the quality of the UK’s current infrastructure systems can reliably
inform the assessment of the UK’s future infrastructure needs, and in turn enable
the delivery of high quality infrastructure. Currently, the assessment of how well
infrastructure is doing too often focuses on the amount of money being spent.9
But infrastructure has a long lifetime, and so its performance should consider
the quality of service delivered by the whole infrastructure system, including its
impact on natural capital. Understanding how the performance of each system
changes over time could form a crucial part of the Commission’s decision making
in future.
The Commission intends to measure the quality of the UK’s current infrastructure
systems based on the framework presented in table 6.1 below. The measures in
the framework work across most sectors, allowing the Commission to compare
different infrastructure systems. They have also been designed to measure
the performance of infrastructure against the Commission’s objectives. These
measures were developed following consultation on an earlier set published in
the Commission’s interim report, Congestion, Capacity, Carbon: Priorities for
national infrastructure.
104
Table 6.1 – Perfomance measures
Domain Sub-domain Transport Energy Waste Water and wastewater Flood risk Digital communications
Passenger/tonne km Energy consumed (e) Total waste Water consumed (e) N/A Gigabytes of data consumed
travelled (e) generated (e) (fixed and mobile) (e)
Volume of Residual waste Wastewater produced (n) Voice minutes (fixed and mobile)
Volume generated (e) (e)
consumption
Number of trips (e) 4G subscriptions (e)
Full fibre subscriptions (e)
Stress test (n) Stress test (n) Stress test (n) Security of supply index (e) Risk of flooding and Stress test (n)
coastal erosion (e)
Resilience to
large shocks Capacity margin (e) Probability of drought (n) Standard of protection
(n)
Expected loss of load (e)
Resilience
Travel time reliability Time that properties N/A Time that properties lose Number of properties Number of serious incidents
Everyday (n) lose access to energy (e) access to water (e) flooded (n) reported to Ofcom (e)
resilience Number of sewer flood
events (e)
Connectivity (n) N/A Gross value added Number of water quality N/A Coverage by technology (e)
105
from waste material incidents (e)
Service quality recovery (e)
Recycling rates (e) Actual speed at peak time (n)
Satisfaction derived Satisfaction derived Design quality (n) Satisfaction derived from Design quality (n) Satisfaction derived from survey
from survey (e) from survey (c) survey (e) (e)
Quality Design quality (n) Design quality (n) Design quality (n) Design quality (n)
Percentage of all 90-second calls

Quality of user completed without interruption
experience (e)
Percentage of mobile data

connections which deliver a
speed of at least 2 Megabits per
second (e)
Note: (e) denotes existing measures; (n) denotes new measures; and (c) denotes measures constructed by the Commission using existing measures
Domain Sub-domain Transport Energy Waste Water and wastewater Flood risk Digital communications
Cost per passenger/ Cost per kilowatt hour Cost per tonne of Cost of water per litre (c) Cost per property Cost per gigabyte of data (fixed
tonne km (c) of energy (c) waste collected and protected (c) and mobile) (e)
disposed/treated (c)
Average annual energy Cost of wastewater treated Cost incurred on flood Average monthly bill (fixed and
Cost Cost
bill (e) per population equivalent (c) risk insurance claims mobile) (e)
(e)
Average annual water and
sewerage bill (e)
CO2e emissions per CO2e emissions per CO2e emissions CO2e emissions per litre of N/A CO2e emissions per gigabyte of
passenger/tonne km kilowatt hour used (c) per tonne of waste water consumed (e) traffic used (n)
(e)(c) produced (c)
Emissions
Total CO2e emissions Total CO2e emissions Total CO2e Total CO2e emission from Total CO2e emissions from digital
from transport (e) from energy (e) emissions from water and wastewater (e) comms (n)
waste (e)
Air quality (e) Air quality (e) Waste generated per Number of serious pollution Measure of habitat N/A
capita (e) incidents caused by water improved or created
companies (e) (e)
Noise (e) Ground pollution Percentage of water bodies

Environmental
Environment from waste (n) with unsustainable levels of
externalities
abstraction (e)
106
Average concentration
of reactive phosphorus in
rivers (e)
To be developed Value of energy services To be developed Value of water services To be developed To be developed
provided by natural provided by natural
environment (e) environment (e)
Natural capital
Cost that energy
services impose on the
natural environment (e)
Congestion (e) Energy efficiency of Reject rates from Leakage (e) N/A N/A
buildings (e) sorting facilities (e)
Transmission/ Capture rate of

Efficiency System efficiency
distribution losses (e) recyclable materials
(e)
Ratio of average to peak
demand (c)
Note: (e) denotes existing measures; (n) denotes new measures; and (c) denotes measures constructed by the Commission using existing measures
Details on responses to the consultation and how these informed the framework
and the measures will be provided in a separate technical annex, to be published
after this Assessment. The annex will also set out how the Commission intends to
further develop performance measures that do not yet exist, including measures
linked to natural capital (working with the Natural Capital Committee), design
quality and stress tests. The measures in the framework are a work in progress
and the Commission expects to update them as new measures are developed or
better data becomes available.
The Commission has gathered data on many of these measures, which will also be
published on the Commission’s website in September 2018. This data gathering
process has highlighted two significant gaps so far:
ll commercial and industrial waste, where government has launched a
competition to develop a new digital solution to track waste.10
ll the number of properties that are flooded where data recorded by
local authorities is not aggregated and published centrally.11
Recommendations on filling these gaps have been set out in earlier chapters of
the report.
107
Endnotes
1
Institute for Government (2017), How to value infrastructure
2
See National Infrastructure Commission (2017), Congestion, Capacity, Carbon: priorities for national infrastructure,
pp.38-39
3
National Audit Office (2013), Over-optimism in government projects
4
Highways England (2015), Post Opening Project Evaluation (POPE) of Major Schemes
5
What Works Centre for Local Economic Growth (2015), Evidence Review 7, Transport
6
The Design Task Force was announced in the interim National Infrastructure Assessment Congestion, Capacity, Carbon
in October 2017 and launched by Professor Sadie Morgan at the Institution for Civil Engineers in February 2018. Its
members are Lucy Musgrave, Hanif Kara and Isabel Dedring. It is chaired by Commissioner Professor Sadie Morgan and
advised by Tony Burton.
7
Perrow (1984), Normal Accidents
8
National Infrastructure Commission (2016), The National Infrastructure Assessment, process and methodology
consultation response.
9
Institute for Government (2017), What’s wrong with infrastructure decision making?
10
See SBRI: smart waste tracking data collection, storage and reporting services: https://apply-for-innovation-funding.
service.gov.uk/competition/175/overview
11
According to internal communication between the Commission and the Environment Agency.
108
7. FUNDING AND
FINANCING
109
The recommendations set out in this Assessment are not

simply a wish list. The recommendations are affordable
within the resources set out by the government and
provide a fully costed plan for infrastructure spending
without significant additional costs to billpayers.
The recommendations in the Assessment have all been carefully considered
by the Commission bearing in mind its objectives. The implications of the
recommendations for public expenditure and for bills have been weighed up.
The Commission has made judgements on priorities for expenditure within the
government’s infrastructure funding guidelines. In reaching its conclusions,
the Commission has drawn on a wide range of evidence and considered the
outcomes of its recommendations under a range of scenarios.
The cost of infrastructure services affects business competitiveness
and households’ quality of life. The Assessment therefore sets out
recommendations to ensure that infrastructure projects are paid for at the
lowest whole life cost. Efficient delivery and management of assets and good
design have a part to play in this. But it also requires improvements in funding
and financing arrangements:
ll A UK infrastructure finance institution if the UK loses access to the
European Investment Bank
ll Improving the analysis of costs and benefits of private financing and
traditional procurement
ll Engaging stakeholders and the public on paying for road use,
recognising that the existing approach is unsustainable
ll Expanding and strengthening the range of mechanisms for
capturing a share of increases in land value associated with
infrastructure.
Paying for infrastructure

The costs of the Commission’s recommendations and who will pay are included
in the tables below. These set out planned infrastructure spending in the period
from 2020 to 2050.
Households ultimately fund all new infrastructure. This occurs through a variety
of channels. Government funded infrastructure is paid for via tax. Infrastructure
paid for in this way is covered in the ‘fiscal remit’ table. Infrastructure funded
by the private sector is paid for through bills and charges paid by households,
businesses, and the public sector (for example water and gas bills). Higher costs
to businesses ultimately feed through to households via the costs of goods and
services. Infrastructure paid for in this way is covered in the bills table.
110
Fiscal remit
The government has given the Commission a long term funding guideline for
public capital expenditure, the ‘fiscal remit’. The Commission “must be able
to demonstrate that its recommendations for economic infrastructure are
consistent with, and set out how they can be accommodated within, gross public
investment in economic infrastructure of between 1.0% and 1.2% of GDP in each
year between 2020 and 2050.” 1
The fiscal remit covers capital expenditure by the public sector, including both
local and national expenditure. It does not include spending by the devolved
administrations, nor does it include day to day spending (‘resource’ spending).2
The fiscal remit does not only cover new projects. Existing commitments and
ongoing investment in maintenance and renewals must also be accommodated
alongside the Commission’s recommendations. The Commission’s remit
specifically excludes consideration of decisions that have already been made, and
spending that has already been committed, such as HS2. Committed spending,
such as HS2; Crossrail 2 and Northern Powerhouse Rail; and maintaining current
assets together add to 1.1 per cent of GDP from 2020-2025 and 0.9 per cent from
2025-2030.
Table 7.1 sets out the Commission’s proposals for the fiscal remit.
The Commission recommends that government should deliver long term
certainty over infrastructure funding by adopting the funding profile set
out in the ‘fiscal remit’ table in Spending Review 2019 and other future
spending plans.
Bills
Households typically pay for infrastructure via bills where consumers can
choose how much, or what level, of a service to purchase. For example, linking
households’ energy bills to their usage helps to keep total consumption at an
efficient and sustainable level.
The Commission is required to provide “a transparent assessment of the overall
impact on costs to businesses, consumers, public bodies and other end users
of infrastructure.”3 Table 7.2 sets out these impacts. Detailed analysis of this is
included in National Infrastructure Assessment impact and costings notes.
Where recommendations have net costs, the Commission believes that these are
manageable and good value relative to the benefits the infrastructure provides.
111
Table 7.1: The fiscal remit

Average annual expenditure
2020-2025 2025-2030 2030-2035 2035-2040 2040- 2045 2045-2050
(£ million, 2018/19 prices)
Transport
HS2 4,500 3,900 900
Crossrail 2 200 2,200 2,900
Northern Powerhouse Rail 200 1,100 1,700 1,800
Network Rail 6,100 6,100
Highways England 4,300 3,200
Strategic Transport* 10,500 11,400 11,200 11,600
Devolved Cities 3,300 3,600 4,600 5,400 6,100 6,800
Transport for London 2,600 2,900 2,200 2,000 2,200 2,400
Urban Major Projects 500 400 2,400 3,100 3,500 3,900
Non-urban local transport 2,700 2,900 3,400 3,800 4,200 4,700
Local Roads Backlog 500 500
Housing Infrastructure Fund 500 200 200 200 200 200
Energy
Energy efficiency 100 300 300 100
EV Charging 2**
Digital
Rural fibre 400 300 100
Waste 600 500 500 500 500 500
Flood Resilience 600 700 900 1,300 1,300 1,300
Studies Contingency 300 400 400 400 400 400
Total expenditure on infrastructure 26,900 29,200 31,500 30,000 29,600 31,800
As a % of GDP 1.2% 1.2% 1.2% 1.0% 0.9% 0.8%
*combined allocation for road and rail.
**£10m funding in 2020/21.
112
Table 7.2: The impact on bills

Average annual aggregate impact
2020-2025 2025-2030 2030-2035 2035-2040 2040- 2045 2045-2050
(£ million, 2018/19 prices)
Heat trials and energy efficiency +110 +270 +190 +180 +180 +180
Waste +140 +110 +50 -10 -30 -60
Flood risk – lower insurance costs -60 -240 -420 -610 -790 -980
Water – resilience to drought +310 +640 +280 +280 +280 +280
Total impact on households,
+510 +780 +100 -150 -370 -580
businesses and public sector
Total impact on households +440 +650 +120 -60 -240 -420
Average impact per household
+£20 +£20 £0 £0 -£10 -£10
(£/year)
Total impact on businesses +50 +90 -20 -70 -100 -130
Total impact on public sector
+20 +40 0 -20 -30 -30
resource spending
Impacts are shown relative to a baseline without the recommendation. This is different to the energy bills impacts described in the
Low Cost, Low Carbon chapter which compare 2050 to today. Negative figures denote savings. Columns may not sum to totals due
to rounding
The Commission’s choices

The recommendations in this Assessment, and the implications for public
expenditure and for bills, reflect the judgement of the Commissioners. In
reaching its conclusions, the Commission has drawn on a wide range of evidence,
including scenario based modelling, stakeholder expertise and opinions, social
research, and specially commissioned studies (which are available on the
Commission’s website). Further details on the Commission’s approach are set out
in The National Infrastructure Assessment: process and methodology and the
interim report Congestion, capacity, carbon: priorities for national infrastructure.
Meeting the Commission’s objectives

These recommendations reflect the Commission’s objectives: to support
sustainable economic growth in every region; improve competitiveness; and
improve quality of life.
Sustainable economic growth in every region: Full fibre digital infrastructure
and urban transport networks lower the costs of connecting firms, workers and
consumers; capture the benefits of higher productivity in dense clusters of firms;
and enable innovation.
International competitiveness: Low cost energy supports international
competitiveness as an input to all economic activity. Promoting electric,
connected and autonomous vehicle infrastructure supports the UK motor
industry to stay at the forefront of innovation.
113
Quality of life: Better air quality from electric vehicles, warmer homes from
energy efficiency and a better designed public realm can improve people’s quality
of life. Resilience to floods and droughts protects people against natural disasters.
Prioritising within the fiscal remit

Resources are inevitably limited. This has required the Commission to prioritise
between available options in some areas.
Prioritise support for new infrastructure networks in the short term:
Broadband and electric vehicle charging have been prioritised in the short term,
when resources are most constrained. These new technologies represent major
opportunities for growth and are particularly time critical if the UK is to remain
internationally competitive.
Prioritise urban transport over intercity networks in the 2030s: Most spending
on major upgrades to urban infrastructure, recommended in Chapter 4, will
come in the late 2020s and especially in the 2030s. This profile reflects the overall
availability of resources, as well as the need for local capability and for proposals
to be developed by cities. In later years, urban spending will be balanced by
reduced spending on major enhancements on the intercity networks, which will
have seen at least a decade of sustained high investment.
Focusing on low regret options on the motorway and major road network
while the impact of new technology is uncertain: Figure 7.1 sets out the
enhancement budget for Road Investment Strategies 1 to 3, together with
historic estimates of equivalent spending in the past. For future Road Investment
Strategies, maintenance, renewals and incremental enhancements should
be prioritised over ‘mega projects’ given the increased uncertainty that new
technology creates for projects with very long payback periods. Large road
and rail projects should compete for the same funding, as indicated in the fiscal
remit table, to ensure the most beneficial projects are taken forward regardless
of mode. An additional £500m a year should be spent on basic maintenance for
local roads between 2025-2035.
Balance increased rail expenditure in the late 2020s with other priorities:
There is a major increase in rail expenditure in the 2020s from HS2, Northern
Powerhouse Rail and Crossrail 2, as shown in figure 7.2. Continuous change is not
sustainable for the rail network and there are other priorities; sums for further
enhancements in Network Rail in the late 2020s (‘Control Period 7’) should be
correspondingly lower, although funding for maintenance and renewals should
be protected.
Provide an indicative budget for Northern Powerhouse Rail of £24 billion from
2023-24 to 2039-40: The business case for Northern Powerhouse Rail remains
under development. It is important that Transport for the North sets its priorities
for the region and a clear budget will allow that to happen. However, city leaders
in the region should have the freedom to shift additional funding from urban
budgets to Northern Powerhouse Rail if they choose.
114
Provide an indicative budget for Crossrail 2 of £27.7 billion from 2023-24

to 2035-36: In line with Transport for a world city,4 this reflects the need for
Transport for London to reduce and phase the costs of the scheme. London
should contribute at least half of the scheme costs.
Provide a gradual increase in the budget for flood protection: This reflects
the long term strategy proposed in Chapter 5. Spending is weighted towards
later years due to other priorities in the 2020s and the time needed for the
development of robust plans to achieve the required level of protection.
Apply efficiency savings to renewals spending: These are in line with
the government’s Transforming Infrastructure Performance5 productivity
programme.
Maintain the Housing Infrastructure Fund outside cities: Within cities, this
funding should be merged into wider devolved funding for strategic transport
and housing strategies.
Leave headroom in the later period: Some recommendations, such as flood
protection, involve spending to 2050. But overall there is considerable space
in later years. This will be needed for future priorities such as zero carbon heat,
surface water flooding or even completely new infrastructure that may be needed
in decades to come.
£3,000
£2,500
£2,000
£1,500
£1,000
£500
£0
5
-70
-10
-15
20
0
-7
-0
-6
-9
-8
-2
-8
-9
-0
-3
15-
10
70
05
20
90
60
80
65
25
00
85
75
95
20
20
19
20
20
19
20
19
19
19
19
19
19
20
Figure 7.1: Historic and planned enhancement spending on strategic roads6
115
£9,000
£8,000
£7,000
£6,000
£5,000
£4,000
£3,000
£2,000
£1,000
£0
2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Crossrail 2 HS2 NPR
Figure 7.2: Capital Investment in rail ‘mega projects’ (£m, 2018/19 prices)
Managing uncertainty
The Commission has also considered how the impact of its recommendations
may be affected by uncertainty, focusing particularly on technology, population,
economic growth and climate change.7 The Commission has sought to
understand how robust its decisions would be to uncertainty, seeking solutions
that will stand the test of time, but recognising that some uncertainty is
unavoidable given the timescales for infrastructure investment.
Balancing the risks of major investments: For full fibre and water, the potential
costs of inaction are much higher than those of action. For flood protection,
a more ‘adaptive’ approach can be taken because defences can be added to
incrementally if risks turn out higher. For energy, the Commission’s judgement
is that the supply chain for nuclear power should be maintained by agreeing
a further plant beyond Hinkley Point C, even though renewables look like an
increasingly viable alternative, as the costs of re-establishing the nuclear supply
chain would be very high.
Making complementary recommendations: Investing in both urban transport
and rural fibre mitigates uncertainty about the future location of economic
activity. Electric vehicle charging helps reduce the cost of more renewables
intensive electricity generation by providing more flexible demand and
potentially lowering the cost of storage.
Planning for future decisions: Investing in renewables in the 2020s will improve
understanding of system balancing costs for the 2030s and 2040s. Separation
of food waste is good value for money today, but also maximises the availability
of biogas. Biogas has a range of potentially high value uses replacing hard to
substitute fossil fuels in future. Assessing the potential impact of connected,
autonomous vehicles on road and rail investment could reduce the risk of costly
long term investments being overtaken by technology.
116
Strategic use of public and private financing

Infrastructure typically requires large up front investment (‘financing’)
followed by a long period in which these costs, plus on going maintenance and
operational costs, are repaid by users or taxpayers (‘funding’). The Commission’s
recommendations will require a combination of public and private financing
mechanisms and these arrangements should be as efficient and as cost effective
as possible.
Finance itself is not in short supply.8 However, in some cases public sector support
can ease constraints on the financing of projects in the private sector. In other
cases, private finance could increase the efficiency of projects in the public sector
and share risks.
UK infrastructure finance institution

The UK has a high proportion of privately owned, operated and financed
infrastructure.9 Almost half of the planned pipeline of infrastructure projects
to 2020/21 will be delivered and funded privately.10 It has well developed capital
markets which generally help to facilitate this private finance. And there is an
appetite on the part of institutional investors to increase both the scope and scale
of their investment in infrastructure projects.11
Both government and arms length independent state institutions can help to
support this investment, by absorbing risk that the market finds hard to manage
and supporting due diligence functions for innovative projects. The government
already has some established mechanisms to support private investment such as
the UK Guarantee Scheme.
There is an ongoing market failure around innovation in the infrastructure sector;
the risks associated with innovative technologies, techniques and financial
products can be too high for the private sector without government support.12
For example there is strong evidence that the Green Investment Bank helped to
catalyse private investment in offshore wind.13 And there is a role for government
in easing liquidity constraints in the infrastructure market during times of crisis.14
Independent financing institutions can mitigate some of the risks involved in
public sector support for private investment. Independent institutions can
provide policy stability in areas which exist outside of the short term political
cycle. They can also develop expertise and credibility, which can be used to
build the understanding and capabilities of both private investors and local
government.15 A portfolio of investments allows an institution to take risk without
imposing an overall cost on the public purse.
In the past, the European Investment Bank and the recently privatised Green
Investment Bank have provided this kind of function in the UK.16 The government
has indicated that it may be mutually beneficial to maintain a relationship
between the UK and the European Investment Bank17, and the Commission
117
has heard from a wide range of stakeholders that this would be their preferred
outcome. However, it may not be possible: a contingency plan is needed.
Any new domestic institution would not score within the Commission’s fiscal
remit, since its activities would score as ‘financial transactions’ rather than as
capital expenditure. However, unlike the European Investment Bank, lending
by any domestic institution would score within the government’s main debt
measure, Public Sector Net Debt.18 A new institution would therefore need a
clear remit, and robust processes, to ensure additionality and ‘sound banking’
(measuring project returns in terms of risk adjusted interest rates and lending at
market rates).19
The Commission recommends that government should maintain access to the
European Investment Bank if possible. If access is lost, a new, operationally
independent, UK infrastructure finance institution should be established by
2021. To enable this, government should consult on a proposed design of the
new institution by Spring 2019. The consultation should cover:
ll Functions, including provision of finance to economic infrastructure
projects in cases of market and coordination failures; catalysing
innovation; and acting as a centre of excellence on infrastructure
project development, procurement and delivery
ll A clear mandate, including sound banking, additionality and having
a wider economic and social impact
ll Governance to safeguard the operational independence of the
institution.
Evaluating the performance of private financing and traditional procurement

As well as the public sector supporting private financing, private finance can
support public sector projects. The introduction of private financing into public
infrastructure delivery came following a poor record of public sector delivery.20 It
has led to quicker delivery of projects, enabling society to access infrastructure
services earlier, and contributed to better public sector commercial capability. 21,22
Private financing, in comparison to traditional procurement, encourages a
whole life approach to project design. The transfer of risk to the private partner
incentivises efficiency in delivery over the project lifecycle but can sometimes
create challenges where requirements change during the project lifetime.
There is a residual level of risk that can never be transferred, since in extreme
circumstances projects can return to the public sector where private providers
go bankrupt.
There has been a slowdown in the use of private financing in recent years due
to uncertainties about its cost effectiveness and the rationale for its use.23 The
overall performance of private finance has not been robustly evaluated.24
118
The Commission proposes an analytical framework for whole life analysis of the
costs and benefits of private financing and traditional procurement, set out in the
technical annex Proposed analytical framework for evaluating the performance
of private financing and traditional procurement. It builds on past studies
considering performance and costs during construction by covering the whole
lifespan of projects and a wider range of potential benefits.
Consultation has found a wide consensus on the dimensions in the framework.
The immediate next steps are for the framework to be piloted to develop insights
on its practical application and identify where it needs to be revised.
Following the pilot, the Commission aims to develop a consistent evidence
base of costs and benefits of financing models through more detailed analysis.
This independent source of evidence should lead to the more strategic use of
private financing and traditional procurement, and improve the design of existing
models to build more collaborative long term approaches.
Additional funding mechanisms

Paying for road use
Road use is a notable exception to the general principle that infrastructure is paid
for through bills where consumers can choose their level of usage.
Over the Assessment’s timeframe changes to the way drivers pay as they use
roads are inevitable. Fuel duty revenues will decline with the impending shift to
electric vehicles.25 Technological change has the potential to radically change
driving patterns and vehicle ownership. The current system of road taxation is
not sustainable.
One option might be to introduce a ‘road pricing’ scheme to charge drivers
according to where and when they drive, which could deliver valuable benefits.
Road pricing can:
ll Pay for new and better road infrastructure; creating a revenue stream
from roads can attract private investment, as with some toll roads
ll Reduce congestion; congestion is estimated to cost the economy over
£35 billion a year, and pricing congestion has been shown to reduce
traffic volumes26,27
ll Protect tax revenue; fuel duty will decline and road pricing is a
sustainable alternative
The changing use of roads presents an opportunity to design a road pricing
scheme that improves on current road taxation by being fairer, more sustainable
and more effective at reducing the negative impacts of driving. Developments
in technology provide new ways to implement road pricing that have previously
been too expensive or impractical. Some possible changes, such as ‘mobility
119
as a service’, where people pay for journeys rather than car ownership, would
naturally fit with alternative forms of road pricing.
There has often been a disconnect between theoretically perfect road pricing
systems suggested by policymakers and the perceived fairness and practicality
of those systems by the public.28 Rather than propose a further technocratic
recommendation the Commission will explore new ways to engage stakeholders
and the public on this topic, looking at a full range of potential options in light of
the major changes in road use and taxation that are inevitable. Reforming how
road use is paid for has been discussed for decades,29 but the issue is becoming
more and more pressing and cannot be avoided forever.
Land value capture

Local funding for infrastructure can strengthen local accountability, sharpen the
incentives for scheme designers to maximise local benefits, and improve the
fairness of the funding regime as local beneficiaries contribute to the scheme
costs. One approach to raising funding locally is to capture part of any increase
in land values from infrastructure development or planning permission for new
developments. But the Commission’s analysis suggests this is not the silver bullet
for funding local infrastructure.30
Whilst the current system, comprising Section 106 contributions from developers
and the Community Infrastructure Levy, is complex, it is more successful at
raising funding than previous approaches.31 Other parts of the tax system, such
as Capital Gains Tax and Stamp Duty, also capture a proportion of land value
increases, although there are no reliable measures of how much. Some have
argued for radical reform of local funding.32 However, without a full picture of
existing receipts it is unclear this would increase total revenues, and the history
of previous reforms argues for caution.33 Reform would undoubtedly lead to costs
and delays in the short term as land owners and developers sought to understand
new liabilities before making major decisions.
The sums potentially available would vary significantly across the country.
Analysis undertaken for the Commission indicates that roads investment which
reduces travel times by 10 per cent in the Cambridge – Milton Keynes – Oxford
Growth Arc is associated with higher average property values of over £3,000 per
property; a similar scheme in the East Midlands is associated with higher values
on average of £2,000 per property and in Yorkshire of £1000 per property.34
The Commission’s remit covers the interaction between infrastructure and
housing, but not housing itself. The Commission has therefore looked at local
funding mechanisms from the perspective of infrastructure funding and has
concluded that the existing system should be improved rather than replaced,
identifying three policies to help raise local revenues.
120
Business rates and council tax

London used a business rate supplement to help fund Crossrail 1.35 This
supplement, charged at 2p for every £1 paid by businesses above a certain
threshold, will eventually provide nearly one third of Crossrail 1’s costs. Applying a
small charge to a large base of rate payers is a simple way to gather a contribution
to scheme costs. The same approach could be applied to council tax, where a
precept could be applied to reflect part of the increase in property values that
result from new transport infrastructure.36 To protect existing residents, the
precept could be applied only to new residents that move into the area. To ensure
the precept is genuinely related to project costs, it could be time-limited.
Changes in the 2011 Localism Act now require a majority of business rate payers to
agree to the supplement, both in number of rate payers and by the value of the
rates paid.37 This is difficult to coordinate; introducing a threshold of one third of
scheme costs before ballots are used would make the funding tool simpler to use
while retaining safeguards. In this way, future infrastructure projects could benefit
from Crossrail 1’s innovative funding structure.
Community Infrastructure Levy
The government are currently consulting on changes to improve the Community
Infrastructure Levy. Pooling section 106 agreements across several projects was
an important means for local authorities to develop bespoke funding solutions
such as the Milton Keynes Tariff. However local authorities are currently not
allowed to do this.38 The government’s proposals would remove pooling
restrictions in some but not all cases, which would create further complexity and
limit flexibility. A simpler approach would be to remove all pooling restrictions
which would allow local authorities to use section 106 more effectively.
Compulsory purchase regime
The compulsory purchase regime, whereby local authorities can buy land as a last
resort, could be strengthened. The current regime is costly, time consuming and
uncertain.39 Conducting an independent assessment of site value at the start of
the process could save money and provide more certainty for the parties involved
in a compulsory purchase order.
The Commission recommends that local authorities should be given further
powers to capture a fair proportion of increases in the value of land from
planning and infrastructure provision. To enable this, government should:
ll Remove pooling restrictions on Section 106 in all circumstances,
through forthcoming secondary legislation by 2020
ll Remove the ballot requirement for upper tier authorities’ powers
to levy a business rate supplement of 2p or less in the pound for
infrastructure, except where the supplement exceeds one third of
scheme costs by 2021
121
ll Give local authorities powers to levy zonal precepts on council tax,

where public investments in infrastructure drive up surrounding
property values by 2021
ll Provide greater certainty in compulsory purchase compensation
negotiations by including independent valuations early in the
process to be paid for by the acquiring authority by 2021.
122
Endnotes
1
HM Treasury (2016), National Infrastructure Commission Remit letter
2
Further details are set out in the Charter for the National Infrastructure Commission, the Government’s Remit letter for
National Infrastructure Commission of 23 November 2016 and in the Commission’s interim report Congestion, Capacity,
Carbon: Priorities for national infrastructure
3
HM Treasury (2016), National Infrastructure Commission Remit letter
4
National Infrastructure Commission (2016), Transport for a world city, converted to 2018/19 prices
5
Infrastructure and Projects Authority (2017), Transforming infrastructure performance
6
Historic data from Department for Transport (2014), Road Investment Strategy: Strategic Vision, 2013/14 prices
7
The Commission has published discussion papers on each of these topics, which are available on the Commission’s
website
8
Cambridge Economic Policy Associates (October 2017), Financing for infrastructure summary report
9
Eunomia Consulting (2018), Comparative Study of National Financing Institutions – commissioned by the National
10
Infrastructure and Projects Authority (2017), Analysis of the National Infrastructure and Construction Pipeline
11
Pensions Infrastructure Platform (2018), Response to Congestion, Capacity, Carbon
12
HM Government (2011), Update on the design of the Green Investment Bank
13
Vivid Economics (2018), The role and impact of the EIB and GIB on UK infrastructure investment
14
Ibid
15
LSE Growth Commission (2013), Chapter IV: Investment in Infrastructure, LSE Growth Commission Report (2013),
Investing for Prosperity – Skills, Infrastructure and Innovation; Vivid Economics (2018), The role and impact of the EIB
and GIB on UK infrastructure investment
16
Vivid Economics (2018), The role and impact of the EIB and GIB on UK infrastructure investment
17
Mansion House 2017: Speech by the Chancellor of the Exchequer, 20 June 2017
18
ONS (2017), Wider measures of public sector liabilities. As a public corporation, a domestic institution would not score
within the more widely used international measure of General Government Gross Debt. The government has also
introduced a new measure, Public Sector Net Financial Liabilities, which would more accurately reflect the impact of any
new institution on overall fiscal risk, by including both assets and liabilities.
19
‘Additionality’ and ‘sound banking’ are two of the three core lending principles used by the European Bank for
Reconstruction and Development. See: Besley, Dewatripont and Guriev (2010), Transition and transition impact: A
review of the concept and implications for the EBRD, Report for the EBRD’s Office of the Chief Economist
20
National Audit Office, Modernising Construction HC-87, Session 2000-01
21
Romboutsos, (2016), Public Private Partnerships in Transport Infrastructure, Transport Reviews and Boardman, et al
(2015), Comparative Analyses of Infrastructure Public Private Partnerships
22
The Allen Consulting Group (2007), Performance of PPPs and Traditional Procurement in Australia; Makovsek (2013),
Public – Private Partnerships, Traditionally Financed Projects, and their Price, Journal of Transport Economics and Policy
23
National Audit Office (2018), PFI and PF2
24
Ibid
25
National Infrastructure Commission (2017), Congestion, Capacity, Carbon: Priorities for national infrastructure
26
Cookson, INRIX Research (2018), INRIX Global Traffic Scorecard
27
Transport for London (2007), Central London Congestion Charging Scheme: ex-post evaluation of the quantified
impacts of the original scheme
28
RAC Foundation (2011), The Acceptability of Road Pricing https://www.racfoundation.org/wp-content/uploads/2017/11/acceptability_of_road_
pricing-walker-2011.pdf
29
Ibid
30
Institute for Fiscal Studies (Forthcoming), Property Value Uplift Tool
31
Crook, T., Henneberry, J., Whitehead, C. (2012), Planning Gain – Providing Infrastructure and Affordable Housing, Wiley
Blackwell
32
Centre for Progressive Policy (2016), Bridging the infrastructure gap
33
Ibid
34
Institute for Fiscal Studies (Forthcoming), Property Value Uplift Tool
35
Greater London Authority (2018), Crossrail Business Rate Supplement 2018/9 ratepayer leaflet
36
Transport for London (2017), Land Value Capture
37
The Localism Act (2011)
38
National Infrastructure Commission (2017), Partnering for Prosperity, and Regulation 123 of the Community
Infrastructure Levy Regulations 2010
39
Compulsory Purchase Association (2017), Annual Law Reform Lecture 2017 pre-event reading material, available at:
http://www.compulsorypurchaseassociation.org/cpa-law-reform-lecture-2017.html
123
124
8. NEXT STEPS
125
This is the Commission’s first Assessment of the UK’s

economic infrastructure. Since its establishment, the
Commission has been working to identify the key
priorities for the nation’s infrastructure, culminating in
the recommendations set out in this Assessment. But the
work does not stop here. These recommendations need
to be implemented. Government, regulators, industry
and others will all need to contribute to making this a
reality. The Commission will report on progress in its
Annual Monitoring Report. And the second Assessment,
expected in around 5 years’ time, will develop on
these themes and identify future priorities for the UK’s
infrastructure.
Over the coming months and years, the Commission will:
ll seek consensus on its recommendations
ll work with government to establish its recommendations as
government policy
ll monitor the implementation of the recommendations set out in the
Assessment alongside those in its earlier studies
ll carry out further work on some of the areas outlined in this
Assessment, including housing, design and economic regulation
ll begin work on the second National Infrastructure Assessment,
expected around 2023.
Consensus building
Too often in the past, a lack of political consensus has led to delays and extra
costs in infrastructure. The Commission was established to provide independent
advice and analysis and to move away from a position where the main promoters
of infrastructure are either politicians or scheme developers, whose arguments,
however well made, are often treated with scepticism. Ultimately, it is for
government to decide on the Commission’s recommendations. However, over
the coming months, the Commission will endeavour to build consensus around
its recommendations and engage across parties and with the public, policy
makers, infrastructure experts and relevant bodies, as set out in its framework
document.
As set out in the Executive summary, the Commission’s remit extends to
economic infrastructure within the UK government’s competence, and will
126
evolve in line with devolution settlements. This means the Commission’s

recommendations will apply to non devolved UK government infrastructure
responsibilities in Scotland, Wales and Northern Ireland (and all sectors in
England). The Commission will continue to engage closely with devolved
administrations and bodies under their jurisdictions as appropriate, particularly
on matters where the respective infrastructure policy responsibilities of the UK
government and devolved administrations interact.
Government response
The Commission’s framework document states that:
“The government will lay the [Commission’s] reports before Parliament, and will
respond to the [Commission’s] national infrastructure assessment and specific
studies. The government will respond as soon as practicable; it will endeavour
to respond within 6 months, and not longer than a year. The response will set
out clearly any further work required to take forward the recommendations.
Recommendations the government agrees should be taken forward will become
known as ‘endorsed recommendations’. Where the government does not agree
with a Commission recommendation, it may put forward an alternative proposal.
“Where the government is responsible for delivering endorsed
recommendations, the government’s endorsement will be a statement of
government policy. Where recommendations have wider implications for the
planning regimes, the government will highlight any further steps needed to
confirm the endorsed recommendation as planning policy. The government will
use the levers at its disposal to deliver endorsed recommendations – whether
through spending, regulation, deregulation, market stimulation, or by setting
strategic priorities for regulators as appropriate. In some cases, endorsed
recommendations will not be directly taken forward by the government, but may
be relevant for decisions made by other bodies such as economic regulators.”
The Commission will provide support to government as it makes its decisions on
the Assessment’s recommendations, including as it prepares for the forthcoming
Budget and Spending Review, to ensure that the analysis and conclusions in the
Assessment are fully understood and any questions are answered accurately.
Monitoring
The Commission has been established as a permanent, independent body,
and so has a role in holding the government to account for implementing its
recommendations, where they have been agreed. The Commission’s framework
document states that “the [Commission] will hold the government to account for
delivering [Commission] recommendations that the government has endorsed
and agreed to take forward.”
The Commission will monitor the government’s progress in delivering endorsed
recommendations, and will comment on this in its Annual Monitoring Report.
127
Where the recommendations have implications for other bodies, such as

economic regulators, the Commission will also comment on the progress made
by the relevant bodies.
Further work
The Commission has set out an ambitious set of recommendations in this
Assessment. However, in some areas there is still further work to do. Alongside
its study programme, which is currently focusing on the future of the UK’s freight
network, the Commission has identified the following priorities for further work:
ll developing the Commission’s work on the link between infrastructure
and housing
ll developing further the work of the design task force to champion
design quality in the nation’s infrastructure
ll addressing the evolution of the regulatory framework and its
adaptability to different models of utility service provision
ll continuing development of the ideas generated by the Commission’s
‘Roads for the Future’ innovation competition, which concludes in
September
ll continuing to develop the Commission’s performance measures, both
by filling gaps – including establishing measures linked to natural
capital, design quality and resilience – and by progressively updating
the measures set out in Chapter 6 as new approaches are developed or
better data becomes available
ll continuing work on cost benefit analysis, including developing
alternative approaches where current methods perform less well
ll developing the analytical framework for the performance evaluation
of public private partnership projects.
The Commission also intends to work with a small number of urban authorities to
explore how the national strategies set out in this Assessment could inform long
term infrastructure planning for cities and city regions.
The second National Infrastructure Assessment

The Commission publishes an Assessment once every five years. Work on the
next Assessment will begin as soon as the first is published.
Given that this kind of cross-sector assessment has not been undertaken at a
national level before in the UK, as a first step the Commission will carry out a
‘lessons learnt’ review shortly after the publication of the Assessment, informed
by stakeholder views.
128
Drawing upon the outputs from this review, the Commission will prepare the
process and methodology for the next iteration of the Assessment, on which it
expects to engage with stakeholders before carrying out a public consultation.
Alongside this, it will develop its evidence base and identify the key areas for
further research and analysis.
An important priority will be to undertake more in-depth analysis of infrastructure
resilience, as previously indicated in the Commission’s Process and Methodology
consultation.1 In addition, a number of other areas have been identified, which
the Commission will return to in its next Assessment, in the light of developing
evidence and technology. They include: the future of heat, as set out in Chapter 2;
a national transport strategy that considers the potential changes to travel
patterns by road and rail as connected and autonomous vehicles become more
widespread, discussed in Chapter 3; the use of data in improving the performance
and planning of infrastructure as data is becoming part of infrastructure; surface
water, building on the joint plans to manage surface water flood risk to be
developed by local authorities and water companies, covered in Chapter 5; and
paying for road use, where the Commission will explore new approaches to
public engagement to identify options which are fair, sustainable and reduce the
negative impacts of driving, covered in Chapter 7.
The second Assessment is expected to be published around 2023.
129
Endnotes
1
National Infrastructure Commission (2016), National Infrastructure Assessment: Process and methodology consultation
130
Annex A: Glossary
Term Meaning
1. Building a digital society
4G Fourth generation of mobile systems. 4G provides faster data speeds than
previous generations.
5G The fifth generation of wireless networks beyond 4G mobile networks. 5G
is expected to deliver even faster data rates and better user experience,
although international standards have not yet been set.
Anti-competitive Strategies designed to limit and prevent fair competition, for example
behaviour predatory pricing and collusion.
Augmented reality Augmented reality is a technology that overlays computer generated
enhancements on the real world.
Broadband A type of high speed internet connection.
Capital costs or Fixed one-time expenses that are incurred upfront, usually when paying
expenditure for assets such as buildings, construction or equipment (ongoing costs are
usually referred to as operational costs).
Clawback mechanism A special contractual clause which allows money that has already been spent
to be paid back under certain conditions.
Connected and Connected vehicles can communicate with their surrounding environment.
autonomous vehicles Autonomous vehicles can operate with little or no human input (be
(CAV) driverless) for some, or all, of the journey. Connected and autonomous
vehicles can do both.
Deregulation Deregulation is the removal of regulation, usually with the aim of increasing
competition and innovation.
Digital economy The digital economy refers to the economic activity that is based around
digital technologies.
Ducts A tube or passageway to hold cables, usually underground.
Economic regulation Economic regulation applies the principles of competitive markets to
network industries to achieve greater efficiency and to move away from
monopolistic outcomes.
Fair bet This is a regulatory principle which recognises that an investing firm needs
to benefit from sufficient upside potential from any investment to offset the
downside risk of failure. The regulator should only impose regulation once a
‘fair’ return has been made.
131
Term Meaning
Gigabit speeds Download speeds above 1000 megabits per second. 1 gigabit is 1,000
megabits.
Megabits per second A measure of the rate at which data can be transmitted. One megabit per
(Mbps) second is 1 million bits per second (bps). One bit is a single binary digit: 1 or 0
Mobile coverage The geographic area covered by mobile services.
Openreach Openreach is the UK’s telecoms incumbent network operator. It owns,
operates and maintains the UK’s main broadband and landline network.
Operating costs or Day-to-day spending on running services and maintenance.
expenditure
Reasonable cost A reasonable cost threshold is the cost limit at which government will
threshold subsidise up to. The costs above this threshold are not deemed reasonable
or fair to impose upon taxpayers or billpayers.
Superfast broadband Broadband services that deliver download speeds of at least 30 megabits per
second (mbps).
Ubiquitous Digital connectivity everywhere.
connectivity
Virtual reality Virtual reality (VR) is an artificial, computer-generated and immersive
simulation usually through a headset.
WiFi A wireless connection which allows devices to connect to the internet.
2. Low cost, low carbon
Balancing The processes and systems required to balance supply with demand in the
electricity system. A range of technologies can provide balancing services.
Biogas A gas produced by breaking down organic matter in the absence of oxygen.
This gas can be used in a similar manner to natural gas to produce heat
or electricity but unlike natural gas, biogas from sustainable sources is a
renewable fuel.
Biomass A renewable fuel of organic material, such as wood, plants or other waste.
Biomass can be burned directly or processed into biofuels such as ethanol
and methane.
Black bag waste Black bag waste is household items which cannot be recycled.
Capacity market In the capacity market the government determines what level of system
security is required for four years ahead and then commissions National
Grid to calculate the amount of generating capacity that would deliver this.
National Grid then runs an auction to procure this capacity at the lowest
price.
Carbon capture and A process to capture, transport and store carbon dioxide emissions from
storage (CCS) fossil fuel use. It prevents the carbon dioxide from entering the atmosphere,
usually by storing it underground.
132
Term Meaning
Climate Change Act The Climate Change Act, established in 2008, sets legally binding targets
to reduce carbon dioxide emissions in the UK by at least 80% by 2050, from
1990 levels.
Decarbonisation Decarbonisation refers to the removal or reduction of carbon dioxide (a
greenhouse gas) from energy sources with the purpose of reducing the
impact of climate change.
Deposit Return Consumers pay a deposit for an item, such as a single use drink container,
Scheme which is redeemed on return of the item.
Digestate Digestate is the solid residue left over from anaerobic digestion which can be
used as fertilizer.
Distribution of The lower voltage (as compared with the transmission of electricity), local,
electricity electricity network which is used to deliver electricity to most customers.
Electric vehicle For the purposes of this report, ‘electric vehicles’ refers to fully electrified
plug-in vehicles that run entirely from an electric battery that must be
recharged. This is distinct from hybrid and plug in hybrid vehicles which have
both a conventional and an electric motor.
Energy Performance An Energy Performance Certificate is required for properties when
Certificate level C constructed, sold or let. It provides details on the energy performance of the
property and what can be done to improve it. The levels range from A-G, A is
the most energy efficient whilst G is the least energy efficient.
Energy system The energy system is the combination and interaction of supply and
demand for energy. Energy is used for a range of different activities, such as:
transport, heating and powering homes and in industrial processes. Energy
is created from a variety of sources including renewables, fossil fuels and
nuclear.
Fossil fuel Fossil fuels are hydrocarbons formed in the earth from biological origin
such as coal, oil and natural gas. They are non-renewable and produce
greenhouse gases when burnt for energy which cause global warming.
Gasification Gasification is a process of converting biomass and waste into fuel. It uses
little or no oxygen to convert carbon-based materials into synthetic gas
which can be used to generate electricity or in place of natural gas.
Greenhouse gas Greenhouse gases trap heat in the atmosphere which leads to global
emissions warming and climate change. Carbon dioxide is the most prevalent of the
greenhouse gases and is emitted from activities such as burning fossil fuels.
MW, GW, TW A watt is a unit of power, which quantifies the rate of energy transfer. A
megawatt (MW) is 1,000,000 watts, a gigawatt (GW) is 1,000 megawatts and
a terawatt (TW) is 1,000 gigawatts.
133
Term Meaning
MWh, GWh, TWh A watt hour is a measure of energy. It is equal to the total energy delivered
by a rate of energy transfer of one watt, provided for one hour. A megawatt
hour (MWh) is 1,000,000 watt hours. A gigawatt hour is 1,000 MWh and a
terawatt hour is 1,000 gigawatt hours (GWh).
Incinerators Facilities in which waste is burned in a controlled fashion, either to reduce
its volume or its toxicity. Energy from waste plants use incineration of waste
to generate electricity, and in some cases heat for domestic or industrial
heating.
Interconnector Electricity interconnectors are physical links which allow the transfer of
electricity across country borders. Britain’s electricity market currently has
links with France, the Netherlands, Northern Ireland and the Republic of
Ireland.
Landfill Area of land where waste is disposed of, either on top or buried.
Load factors The load factor is the ratio of total energy used in a period to the maximum
possible energy use in that period.
Natural gas Natural gas is a fossil fuel used as a source of energy for heating, cooking,
and electricity generation. It is mainly composed of methane, which burns to
give carbon dioxide and water vapour.
Nuclear power plant Power plants make electricity. A nuclear power plant does this through
nuclear reactions relying upon uranium (a non-renewable energy source).
Nuclear power plants do not emit greenhouse gases but they do produce
radioactive waste.
PET PET (polyethylene terephthalate) is a very common plastic widely used for
packaging food and drinks.
Power generation Power generation refers to the creation of electricity.
Power station A power station is where electricity is generated.
PVC PVC (polyvinyl chloride) is a very common plastic used in packaging.
Pyrolysis The burning of waste in a controlled (oxygen-depleted) environment to
generate a combustible gas (syngas).
Recycling The process of converting waste into reusable material.
Renewable energy Renewable energy is generated from natural resources, such as sunshine and
wind.
Small modular reactor Small modular reactors generate electricity by a nuclear reaction. These
reactors are smaller than conventional nuclear reactors, with power outputs
of around 300 MW compared to around 1000 MW or more. No small
modular reactors are currently in commercial operation.
Tidal lagoon A tidal lagoon is a power station which generates tidal power. It is an
enclosed area of coastline with a high tidal range which drives turbines and
generates electricity.
134
Term Meaning
Tidal power Tidal power is the production of electricity using the ocean’s tide. It is a
renewable and predictable source of energy.
Transmission of The high voltage electricity network, used to move electricity long distances
electricity across the country.
Wholesale market Great Britain has a liberalised electricity wholesale market where prices are
not set by a regulator. The wholesale market is where retail suppliers, traders
and large consumers purchase energy in bulk from those that the generate
energy.
3. Revolutionising road transport
Centre for Connected The organisation which works across government to support the market for
and Autonomous connected and autonomous vehicles.
Vehicles (CCAV)
Charge point A charge point is the infrastructure which supplies the electricity to recharge
electric vehicles.
Control Period 6/7 Network Rail, which owns and operates the railway infrastructure in England,
Wales and Scotland, has 5-year ‘control periods’ to decide investment
priorities. Control Period 6 and 7 refer to the periods 2019/20-2023/24 and
2024/25-2028/29 respectively.
Freight Freight is the term used to define the transportation of goods rather than
people.
Hybrid vehicle A hybrid vehicle is one which uses two different energy sources, such as
petrol or diesel with electricity.
Internal combustion An internal combustion engine vehicle is a conventional vehicle which runs
engine vehicle by burning a fuel, usually petrol or diesel, inside the engine.
Interoperable Interoperability refers to the ability of a product or system to operate with
other products or systems without any restrictions.
National Grid A British multinational electricity and gas utility company whose operations
include owning and operating electricity transmission network assets and
part of the national gas grid
Rapid chargers Rapid charge points, of 43kW or above, can charge an electric vehicle
battery in 20-30 minutes. Some ‘fast’ chargers, of 22kW, can charge current
models of electric vehicle in about an hour.
Road investment The government’s investment plans for 5 year periods for the Strategic
strategy (RIS) Road Network of 4,400 miles of motorways and major ‘A’ roads managed by
Highways England. Road investment strategy 1 covers 2015/16-2019/20; Road
investment strategy 2 will cover 2020/21 to 2024/25.
135
Term Meaning
S-shaped diffusion The diffusion of an innovation is said to follow an S-shaped curve. This
curve involves three phases: slow initial uptake by a few early adopters; uptake
rapidly increases as the innovation gains popularity and finally; uptake slows
down and levels off as the innovation reaches maturity.
Vehicle to grid Vehicle to grid systems involve electric vehicles returning power, stored in
car batteries, to the electricity grid at peak times.
4. Transport and housing for thriving city-regions
Brownfield Brownfield land refers to urban sites that have had previous developments
on them but are now vacant, derelict or contaminated.
City Cities are large urban areas. There is no single definition in use in the UK.
Generally, the Assessment uses the ‘primary urban area’ definition originally
established for the State of the English Cities report. Under this definition,
there are 63 cities in the UK. This equates to cities with a population of
around 110,000 or larger. ‘Major cities’ refers to the largest UK cities, with
a population of around 500,000 or larger (Birmingham, Bristol, Glasgow,
Liverpool, Leeds, London, Manchester, Newcastle, Nottingham and Sheffield
on a primary urban area definition). However, note that in figure 5.3, the
definition of major cities relies on Office for National Statistics rural-urban
classification data for ‘major’ and ‘minor’ conurbations, which excludes
Bristol.
Combined authority Combined authorities are corporate bodies formed of two or more local
government areas.
County council Many areas in England have two tiers of local government: (1) county
councils and (2) district, borough or city councils. County councils cover
the whole county and are responsible for services which include transport,
education and social care.
Crossrail Crossrail, also known as the Elizabeth Line, is a new railway running for more
than 60 miles from Reading and Heathrow in the west, underneath London
and out to Shenfield and Abbey Wood in the east. Crossrail is expected to
open at the end of 2018.
Crossrail 2 Crossrail 2 is a proposed new rail line which would run from the south-west
to the north-east of London. Construction is expected to start in the early
2020s with the line opening in the early 2030s.
District council Many areas in England have two tiers of local government: (1) county
councils and (2) district, borough or city councils. District councils cover
areas within county councils and are responsible for services which include
housing and planning applications.
Dockless cycle Dockless cycle is a service in which bikes can be located, hired and unlocked
using a smartphone app and does not require a docking station.
Highways England The publicly owned organisation which operates, maintains and improves
England’s 4,400 miles of motorways and major A roads.
136
Term Meaning
HS2 High Speed 2 is a planned new high-speed rail network linking London,
the West Midlands, Leeds and Manchester. The project is expected to be
completed by 2033.
Integrated A single plan for urban development covering transport, housing and related
development plan infrastructure.
Interurban transport Transport between cities.
Mayoral combined Mayoral combined authorities are corporate bodies formed of two or more
authority local government areas with an elected mayor. There are currently 7 mayoral
combined authorities in the UK.
Metro mayor A metro mayor is a person elected to chair a combined authority with
powers to make decisions across the whole city region. There are currently 7
metro mayors in the UK.
Network Rail Network Rail is the publicly owned organisation which owns and operates
the railway infrastructure in England, Wales and Scotland.
Northern Powerhouse Northern Powerhouse Rail, also known as High Speed 3 (HS3) or Crossrail
Rail for the North, is a proposed strategic rail programme to connect the major
cities in the North of England.
Transport for London Transport for London is the authority responsible for the transport system in
(TfL) London.
Unitary authority In some parts of the country, one tier of local government provides all the
local services, these are known as unitary authorities.
Urban transport Transport within cities.
5. Reducing the risks of drought and flooding
Catchment Flood Catchment Flood Management Plans assess all types of inland flooding from
Management Plans rivers, groundwater, surface water and tidal flooding. Their purpose is to
help the Environment Agency and their partners to plan and agree the most
effective way to manage flood risk.
Common Agricultural The Common Agricultural Policy is a European Union system of subsidies and
Policy support programmes for agriculture.
Desalination Desalination is the process of removing salt and other minerals from water.
Drainage and Drainage and Wastewater Management Plans are long term plans for
Wastewater drainage and wastewater services. The framework for developing these plans
Management Plans is currently being defined by the 21st Century Drainage Programme.
137
Term Meaning
Drought Drought is defined for this report as a period of such low rainfall that
companies have to impose restrictions on households’ water supply, by
providing water only at certain times of the day or through temporary
taps (standpipes) in the streets. The likelihood of a drought occurring is
measured by its annual probability. Typically, the lower the chance of a
drought occurring, the worse the drought is likely to be. The probabilities
mentioned in this report are:
1 per cent annual probability: approximately a 1 in 4 chance of drought by
2050; this is used as a proxy for the worst recorded drought in recent history
0.5 per cent annual probability: approximately a 1 in 7 chance of drought
by 2050
0.2 per cent annual probability: approximately a 1 in 17 chance of drought
by 2050.
Grey / green Grey infrastructure refers to man-made, constructed assets such as pipes,
infrastructure sewers and dams. Green infrastructure makes use of natural processes to
provide infrastructure services, such as wetlands, which can provide flood
resilience and wider benefits such as enhancing biodiversity.
Managed retreat Managed retreat is also known as coastal or defence realignment. It refers to
the controlled flooding of a defined area to manage the risk of flooding or
coastal erosion in the wider area.
Megalitre per day (Ml/ One Megalitre is equal to 1000 cubic metres or 1 million litres.
day)
National water Coordinated and strategic transfers to move water between water
network companies and regions based on their needs.
Price Review The process undertaken every five years by Ofwat to determine water
company price controls for the next five years.
Shoreline Shoreline Management Plans identify the most sustainable approach to
Management Plans managing the flood and coastal erosion risks to the coastline looking up to
100 years ahead.
Surface water Surface water is rain water that collects on the earth’s surface. Surface water
flooding occurs when intense rainfall overwhelms the capacity of local
drainage systems.
Waste water Water that has been affected by human use such as flushing and washing.
Water supply The source, means and process of supplying water for people to use.
Water transfer Water transfers involve water supply infrastructure to move water from one
place to another. They can be made of man-made structures such as pipes
and canals or a combination of such structures with rivers or other existing
water courses.
138
Term Meaning
6. Choosing and designing infrastructure
Artificial intelligence The development of machines that can perform tasks normally requiring
human intelligence.
Digital twin A digital model of infrastructure which will be able both to monitor
infrastructure in real-time and to simulate the impacts of possible events
such as a natural disaster or a new train line.
Hybrid bill A hybrid bill is a set of proposals for introducing new laws, or changing
existing ones. They are generally used to secure powers to construct and
operate major infrastructure projects of national importance. Hybrid bills
address both public and private matters.
Infrastructure and The IPA is the government body responsible for supporting the delivery of
Projects Authority infrastructure and other major projects, reporting to Cabinet Office and HM
Treasury.
Infrastructure Client The Infrastructure Client Group supports the development and exchange
Group of best practice to improve the efficiency of the construction sector and
help deliver major cost savings. It is made up of government and industry
representatives from the major infrastructure clients.
National Policy National Policy Statements were established under the Planning Act 2008.
Statements They set out national policy for a sector in one place and are intended to
provide greater clarity and certainty for the planning process to deliver
Nationally Significant Infrastructure Projects.
Nationally Significant Nationally Significant Infrastructure Projects are large scale developments
Infrastructure Projects relating to energy, transport, water, or waste. They require only a single
type of planning consent, known as a Development Consent Order, which is
designed to be a much quicker process than applying for several individual
planning consents separately. This was established under the Planning Act
2008 and amended by the Localism Act 2011.
Natural capital Natural capital is the ‘stock’ of natural assets. These include: waters, land, air,
species, minerals and oceans
Resilience The United Nations defines resilience as the ability of a system, community
or society exposed to hazards to resist, absorb, accommodate, adapt to,
transform and recover from the effects of a hazard in a timely and efficient
manner.
What Works Centre The What Works Centre for Local Economic Growth was set up in 2013 to
for Local Economic analyse which policies are most effective in supporting and increasing
Growth local economic growth. It is an independent organisation funded by the
Economic and Social Research Council and government.
139
Term Meaning
7. Funding and financing
Capital Gains Tax Capital Gains Tax is a tax on the profit of the sale of an asset that has
increased in value.
Capital markets The part of the financial system involved in raising long term financing to
support investment. It involves the issue and trading of equity (company
shares), debt (corporate and government bonds), and other long term
financial instruments.
Community A fixed charge based on the development of new floor space. The money
Infrastructure Levy can be used to fund infrastructure that is needed as a result of development.
(CIL) It came into force in April 2010.
Economic Economic infrastructure refers to assets which facilitate economic activity
infrastructure such as: transport, energy, digital communications, water supply, waste
management and flood risk management.
European Investment The European Investment Bank is the European Union’s bank for providing
Bank (EIB) finance and expertise for sustainable investment projects that contribute to
EU policy objectives.
Fuel duty Fuel duty is a tax on petrol, diesel and other fuels used in vehicles or for
heating.
Green Investment The UK Green Investment Bank (now the Green Investment Group)
Bank (GIB) was publicly owned, but is now an independent organisation owned by
Macquarie Group Limited. The GIB was established in 2010 to increase the
UK’s ability to meet its environmental targets and commitments by getting
green infrastructure projects financed more quickly than would otherwise
have been the case.
Housing Infrastructure The Housing Infrastructure Fund is a government capital grant programme
Fund to help unlock new homes in areas with the greatest housing demand. The
fund is £5 billion and funds the local infrastructure necessary before homes
can be built.
Localism Act 2011 An Act of Parliament which amended powers for local authorities, including
housing and planning.
Pooling restrictions Limits on the number of number of Section 106 agreements which can be
used to fund projects or types of infrastructure. According to Regulation
123 of the Community Infrastructure Levy regulations, they must be five or
fewer.
Precept A precept is an additional levy within Council Tax
140
Term Meaning
Private finance The Private finance initiative is a method for the private sector to finance
Initiative (PFI) public infrastructure. In the UK, the original private finance initiative
has been replaced by ‘Private Finance 2’. The private partners invest
equity, and take on significant levels of borrowing to finance the upfront
costs of infrastructure projects. The project is then leased back to the
relevant government body which makes regular payments to the project
company, typically over 25 years. More generically, the term ‘public private
partnership’ is used to cover a range of cooperative arrangements between
public and private sector bodies, including private finance initiative type
arrangements.
Risk-adjusted interest The risk-adjusted interest rate refers to the rate of interest on debt financing
rates that is adjusted to reflect project specific risks, adding a premium to the cost
of debt financing.
Section 106 Legal agreements between local authorities and developers to mitigate the
agreements impact of new developments through contributions towards site-specific
infrastructure, including affordable housing. They arise from section 106 of
the Town and Country Planning Act 1990.
Spending Review 2019 Spending Reviews set out the government’s spending plans. The next
Spending Review will take place in 2019.
Stamp Duty Stamp Duty is a tax paid when purchasing a property. It is calculated based
on the purchase price of the property.
Whole life cost The whole life cost is the amount that a product or service costs over its
lifetime. It includes the initial capital cost, the costs to run, maintain, repair
and upgrade, as well as the eventual disposal costs.
141
Annex B: Acknowledgements
The Commission is grateful to everyone who has engaged with the National
Infrastructure Assessment process. The list below sets out organisations that have
engaged with the Commission since publication of its interim report Congestion,
Capacity, Carbon: Priorities for National Infrastructure through at least one of the
following means:
ll submitting consultation responses to the interim report
ll participating in roundtables
ll attending meetings with members of the Commission Secretariat.
Former Commissioners Lord Adonis, Demis Hassabis, Lord Heseltine and Sir Paul
Ruddock were all members of the Commission at earlier stages of the Assessment
process and contributed to it throughout their tenure.
The Commission would like to thank everyone who responded to earlier
consultations (on the Process and Methodology for the Assessment, and the Call for
Evidence on the Assessment), commented on the driver papers, and participated in
initial workshops and roundtables. The Commission acknowledges the contribution
of its expert advisory groups for their input throughout the Assessment process,
the Infrastructure Transitions Research Consortium for support with modelling, and
the consultants that have been engaged by the Commission and contributed to
developing its evidence base.
The Commission is also grateful to those who have engaged with the Assessment in
an individual capacity, to officials from across government and to those members of
the public that took part in social research workshops and polling.
The Commission would like to acknowledge members of the Secretariat who worked
in the Assessment team: Ioannis Andreadis, Matthew Behull, Katie Black, Tom
Bousfield, Tom Bradbury, Alexa Bruce, Peter Burnill, Anesu Bwawa, Nathaniel Cowton,
Matt Crossman, Manuela Di Mauro, Samuel Downes, Awaritoma Efejuku, Franscesca
Fabbri, Jonathan Hale, Ted Hayden, Sarah Hayes, Catherine Jones, Jack Large, Faraz
Latif, Bianca Letti, Donna Leong, Greg McClymont, Sharmila Meadows, Chris Newitt,
Federica Odifreddi, Sarah Rae, James Richardson, Eric Salem, Dörte Schneemann,
Andrea Silberman, Alwyn Spencer, Olivia Stevens, Michael Tran, Siddharth Varma,
Tom Wickersham, Stephanie Williams and Ruth Xue.
142
Organisations engaged
360 Environmental Bath and North East Somerset Council
ABB Group Biffa
Adaptation Sub-Committee of the Biofuelwatch
Committee on Climate Change Birmingham City Council
Adelard LLP Bit Commons
AECOM Blueprint for Water
Affinity Water Borough of Poole
Air Broadband Bournemouth Borough Council
Airport Operators Association BPP Consulting
Alan Turing Institute Bright Blue
Allderdale Borough Council Bristol City Council
Allen & Overy British Broadcasting Corporation
Amey British Ceramic Confederation
Anaerobic Digestion and Bioresources British Chambers of Commerce
Association British Glass
Anglian Central Regional Flood & Coastal British Motorcyclists Federation
Committee (Enterprises) Limited
Anglian Water British Plastics Federation
Anthesis Group British Ports Association
Arqiva British Property Federation
Arriva British Retail Consortium
Ascential British Standards Institute
Asian Infrastructure Investment Bank British Telecom
Association for Consultancy and Broadband for the Rural North Ltd
Engineering
Broadband Stakeholder Group
Association for Decentralised Energy
Brownsholme Hall
Association for Project Management
Buckinghamshire Thames Valley Local
Association for the Conservation of Enterprise Partnership
Energy
Building Research Establishment
Association of British Insurers
Business in the Community
Association of Directors of Environment,
Economy, Planning and Transport Cabinet Office
Atkins Cadent Gas
Atlantic Gateway Cambridge Centre for Smart
Infrastructure and Construction
Atlantic SuperConnection LLP
Cambridge Econometrics
Aurora Energy Research
Campaign for Better Transport
Aviva
Campaign to Protect Rural England
BAI Communications
Campbell Lutyens
143
Carbon Capture and Storage Association Common Futures Network

Carbon Connect Community Futures
Carbon Trust Community R4C
Cardiff Council Compulsory Purchase Association
Central Bedfordshire Council Confederation of British Industry
Centre for Cities Confederation of Paper Industries
Centre for Progressive Policy Confederation of Passenger Transport
Centre for Transport Studies, Imperial UK
College London Connect Plus
Centre for Urban and Regional Constructing Excellence in Wales
Development Studies, Newcastle Construction Industry Research and
University Information Association
Chargemaster Consumer Council for Water
Chartered Institute of Highways and Core Cities
Transportation Cornwall and Isles of Scilly Local
Chartered Institute of Housing Enterprise Partnership
Chartered Institute of Transport and Cornwall Council
Logistics Cory Riverside Energy
Chartered Institution of Building Service Country Land & Business Association
Engineers
Crossrail 2
Chartered Institution of Civil
Engineering Surveyors Cumbria County Council
Chartered Institution of Wastes David Lock Associates
Management db symmetry
Chartered Institution of Water and Deloitte
Environmental Management Design Commission for Wales
Chatham House Design Council
Cheshire and Warrington Local Digital Lancashire
Enterprise Partnership Dorset Local Enterprise Partnership
Cheung Kong Hutchison Holdings Drax Group plc
Cisco Drinking Water Inspectorate
City and Financial Global E.ON UK plc
City of Bradford Metropolitan District E3G
Council East Northants District Council
CityFibre Eden Council
Clarion Housing Group EDF Energy
Climate Genocide Act Now EE Limited
Coca-Cola EEF Limited
Commission on Travel Demand Electric Infrastructure Security Council
Committee on Climate Change Electricity North West
Committee on Fuel Poverty Element Energy
144
ELEXON Friends of the Earth England, Wales and

Ellen MacArthur Foundation Northern Ireland
Ely Group of Internal Drainage Boards Frontier Economics
ENCORE+ FTTH Council
Energy & Utilities Alliance Funding Group for River Thames Flood
Energy Agency Alleviation Scheme
Energy Insight Limited Future Cities Catapult
Energy Networks Association Limited GB Railfreight Limited
Energy Systems Catapult Geovation
Energy Technologies Institute Gigaclear
Energy UK Global Change Institute
EngineeringUK Global Infrastructure Hub
Environment Agency Global Infrastructure Investor
Association
Environmental Change Institute
University of Oxford Gloucestershire County Council
Environmental Services Association Go-Ahead
Essex and Suffolk Water Greater London Authority
Essex County Council Greater Manchester Combined
Authority
Eunomia
Green Alliance
European Bank for Reconstruction and
Development Green Investment Group
European Commission Greenpeace
European Investment Bank Greenwood Consultants
European PPP Expertise Centre Hafren Power Limited
Existing Homes Alliance Scotland Halcyon Tidal Power LLC
FCC Environment Hampshire & Isle of Wight Wildlife Trust
Federation of Master Builders Hampshire County Council
FirstGroup plc Hastoe Housing Association and
Sustainable Homes Limited
Fitch Ratings
Health and Safety Executive
Flood Hazard Research Centre
Middlesex University Heart of the South West Local Enterprise
Partnership
Flood Re
High Speed Rail Industry Leaders
Floow Limited
Highways England
Food and Drink Federation
Historic England
Ford
Home Builders Federation
Francis Taylor Building
Homes England
Freight on Rail
Horizon Nuclear Power
Freight Transport Association
HR Wallingford
Freightliner Group Limited
HS2 Limited
145
Hull City Council Lancaster & District Chamber of

Hutchison 3G UK Limited Commerce
Hyperoptic Lancaster City Council
ifibre Lancaster University
Imperial College London Legal & General
INCPEN Leicester City Council
Independent Networks Cooperative Lincolnshire County Council
Association Liverpool City Region Combined
Infrastructure Ontario Authority
Infrastructure Operators Adaptation Living PlanIT
Forum Lloyds Register Foundation
Infrastructure Transitions Research Local Authority Recycling Advisory
Consortium Committee
InLinkUK Local Government Association
Innovate UK Local Government Association Coastal
INRIX Special Interests Group
Institute for Fiscal Studies Local Government Flood Forum
Institute for Government Local Government Technical Advisers
Institute for Public Policy Research Group
Institute for Transport Studies London and Quadrant Housing Trust
Institute of Asset Management London Councils
Institution of Engineering and London School of Economics and
Technology Political Science
Institution of Civil Engineers Long Term Infrastructure Investors
Association
Integrated Transport Planning
Longbay Seapower Limited
International Monetary Fund
Low Carbon Contracts Company
Ipsos MORI
Luton Borough Council
ITS Technology Group
M&G Investments
Jacobs Engineering Group Inc.
Mace
Jaguar Land Rover
Macquarie Group
JBA Consulting
Manchester Airports Group
Kent County Council
Markides Associates
Kettering Borough Council
Marks and Spencer
Kilbride Rail
Mayor of Cambridgeshire and
Kingspan Insulation Limited Peterborough
KPMG Mayor of Greater Manchester
Laing O’Rourke Mayor of Liverpool City Region
Lancashire Care NHS Foundation Trust Mayor of London
Lancashire County Council Mayor of the Tees Valley
146
Mayor of the West Midlands Nexus

Mayor of the West of England Nissan
Merseytravel North East Combined Authority
Met Office North West Business Leadership Team
Metronet UK (now M24Seven) Northamptonshire County Council
Middlesex University Northern Gas Networks
Midlands Connect Northern Ireland Executive
Milton Keynes Council Northern Ireland Fuel Poverty Coalition
Mineral Products Association Northumberland County Council
Mineral Wool Insulation Manufacturers Northumbrian Water
Association Norton Rose Fulbright
Ministry for the Economy and Finances Nottingham City Council
(France) Nuclear Industry Association
Ministry of Transport & Communications O2
(Norway)
Ofcom
Mitsubishi UFJ Financial Group
Office of Road and Rail
Mobile UK
Ofgem
Motorcycle Industry Association
Ofwat
Mott MacDonald
Old Oak and Park Royal Development
MWH Global Corporation
National Association of Waste Disposal OMEGA Centre
Officers
Openreach
National Audit Office
Orbit Group Limited
National Energy Action
Ordnance Survey
National Farmers Union
Organisation for Economic Co-
National Flood Forum operation and Development
National Grid Ørsted
National Infrastructure Planning Packaging Federation
Association
Peabody
National League of Cities
Peel Energy
National Nuclear Laboratory
Peel Land and Property
Natural Capital Committee
Pegasus Group
Natural Energy Wyre
Pennon Group
Natural England
Pensions Infrastructure Platform
NERA Economic Consulting
Pinsent Masons
Nesta
Pipe Jacking Association
Network Rail
Plymouth City Council
New Civil Engineer
Policy Connect
Newcastle City Council
Policy Exchange
Newcastle University
147
Pöyry Scottish Government

Prism Consulting Group LLC Scottish Power
Proctor and Gamble Severn Trent Water
Prospective SGN
RAC Foundation Sheffield City Region
RAC Shropshire Council
Radioactive Waste Management Siemens
Rail Delivery Group Skanska
Rail Freight Group Sky
Railway Industry Association Smarter Cambridge Transport
Recycling Technologies Society of Motor Manufacturers and
Regulatory Economics Traders
Renewable Energy Association South East England Councils
Resource and Waste Solutions South East Essex Action Group Alliance
Partnership South East Water
Resource Futures South Gloucestershire Council
Resources and Waste UK South West Water
Ricardo South Yorkshire Passenger Transport
Risk Management Solutions Executive
Road Haulage Association Limited Southern Water
Rod Rainey & Associates Limited SSE
Rolls Royce Stagecoach
Royal Academy of Engineering Steer Davies Gleave
Royal Institution of British Architects SUEZ UK
Royal Institution of Chartered Surveyors Surrey County Council
Royal Society Sustainable Energy Association
Royal Society for the Protection of Birds Sustrans
Royal Town Planning Institute Sweco
RWE Generation UK Swindon Borough Council
SAID Business School Tactis
Savills plc TalkTalk
Sayers and Partners Tantalum Corporation
Scottish and Southern Energy Enterprise Tarmac
Scottish Association for Public Transport Taylor Wimpey
Scottish Carbon Capture & Storage Tech UK
Scottish Environment Protection Agency Technical University Bergakademie
Scottish Federation of Housing Freiberg
Associations Tees Valley Combined Authority
Scottish Futures Trust Teesside Collective
Tesco
148
Thames Water University of Glasgow

The Infrastructure Forum University of Hull
The Law Society of England and Wales University of Leeds
The Society for Poole University of Manchester
Three University of Northampton
Tidal Lagoon University of Oxford
Tolvik Consulting University of Sheffield
Town and Country Planning Association University of Sussex Science Policy
Trades Union Congress Research Unit
Transition Town Brixton Urban Transport Group
Transport for Greater Manchester Urban Water Cycle Solutions
Transport for London Urbed
Transport for the North Urenco
Transport for West Midlands Valpak
Transport Research Laboratory Vattenfall
Transport Systems Catapult Veolia
TravelWatch NorthWest Virgin Media
Trees and Design Action Group Viridor
Turner & Townsend Vivid Economics
UCL Institute for Innovation and Public Vodafone
Purpose Waste and Resources Action Programme
UK Broadband Limited Water Resources East
UK Collaboratorium for Research on Water Resources in the South East
Infrastructure and Cities Water UK
UK Energy Research Centre Waterscan
UK Green Building Council Waterwise
UK Power Networks Welsh Government
UK Rainwater Management Association West of England Combined Authority
UK Regulators Network West Yorkshire Combined Authority
UK Water Industry Research Westinghouse Electric Company LLC
Unilever Westminster Energy Environment &
Uniper SE Transport Forum
United Kingdom Onshore Oil and Gas Westminster Energy Forum
United Kingdom Without Incineration Wheels for Wellbeing
Network Wildfowl & Wetlands Trust
United Utilities Wildlife and Countryside Link
University College London Wiltshire Council
University of Cambridge Wood Plc
University of Edinburgh Woodland Trust
University of Exeter Energy Policy Group
149
WSP Global
WWF
Yorkshire Water
Zero Carbon Futures
ZTE Corporation
150
Annex C: Supplementary

documents
The Commission has produced or commissioned the reports listed below as part
of the analysis supporting the National Infrastructure Assessment. All reports are
available on the Commission’s website or will be when published.
National Infrastructure Commission reports

National Infrastructure Assessment impact and costings notes, July 2018
Technical annex: Analysis of drought resilience, July 2018
Technical annex: Flood modelling, July 2018
Technical annex: Energy and fuel bills today and in 2050, July 2018
Technical annex: Tidal power, July 2018
Technical annex: Power system effects of electric vehicles, July 2018
Technical annex: Proposed analytical framework for evaluating the performance of
private financing and traditional procurement, July 2018
Preparing for a drier future: England’s water infrastructure needs, April 2018
Congestion, Capacity, Carbon – Priorities for National Infrastructure, October 2017
Congestion, Capacity, Carbon – Modelling annex, October 2017
Congestion, Capacity, Carbon – Modelling annex data, October 2017
The impact of the environment and climate change on future infrastructure supply
and demand, June 2017
Economic growth and demand for infrastructure services, March 2017
The impact of population change and demography on future infrastructure demand,
December 2016
The impact of technological change on future infrastructure supply and demand,
December 2016
National Infrastructure Assessment: Call for evidence, October 2016
151
The National Infrastructure Assessment process and methodology: Consultation

response, October 2016
Annex: Responses to National Infrastructure Assessment process and
methodology consultation overview, October 2016
National Infrastructure Assessment process and methodology: a consultation,
May 2016
Reports commissioned for the Assessment

Institute for Fiscal Studies (forthcoming), Property Value Uplift Tool
Arup (July 2018), Congestion, Capacity, Carbon: priorities for national infrastructure,
report on consultation responses
Anthesis Consulting (July 2018), Waste infrastructure analysis for England
Atkins (July 2018), Analysis of the costs of emergency response options during a
drought
Aurora Energy Research (July 2018), Power sector modelling: system cost impact of
renewables
Energy Systems Catapult (July 2018), Electric vehicle charging cost analysis
Eunomia (July 2018), Comparative study of national infrastructure financing
institutions
Gibbons and Graham (July 2018), National Infrastructure Commission urban capacity
economic analysis.
JBA Consulting (July 2018), Flood standards of protection and risk management
activities
Lomax and Smith (July 2018), Effect of capacity constraints on population and
employment distribution
Prospective (July 2018), Transport connectivity
Publica (July 2018), Design Task Force, Design and Infrastructure – Sector review of
attitudes
Publica (July 2018), Design Task Force, Developing design principles for national
infrastructure
Regulatory Economics (July 2018), Analysis of the costs of water resource
management options to enhance drought resilience
Steer Davies Gleave (July 2018), Urban transport network review
152
Expedition Engineering and Marko&Placemakers (July 2018), Design Task Force, The
value of design in infrastructure delivery
Vivid Economics (July 2018), The role and impact of the EIB and GIB on UK
infrastructure investment
Element Energy (May 2018), Cost analysis of future heat infrastructure options
Arup and University College London (December 2017), Infrastructure and digital
systems resilience, literature review
Arup and University College London (December 2017), Infrastructure and digital
systems resilience
Frontier Economics (December 2017), Future benefits of broadband networks
Tactis and Prism Business Consulting (December 2017), Costs for digital
communications infrastructures
Simpson and Ives (November 2017), Scenarios of future water availability in the UK
BritainThinks (October 2017), National Infrastructure Commission report from citizen
research
Arup (October 2017), International infrastructure governance report
Cambridge Economic Policy Associates (October 2017), Financing for infrastructure
summary report
Cambridge Economic Policy Associates (October 2017), Review of the UK
infrastructure financing market
Cambridge Economic Policy Associates (October 2017), UK infrastructure pipeline
analysis
JBA Consulting, SDG Economic Development, Temple and GreySky (October 2017),
National Infrastructure Commission, performance measures
International Transport Forum (March 2017), Strategic infrastructure planning;
international best practice
153
Annex D: Recommendations
1. Building a digital society

The Commission recommends that government should set out a nationwide full
fibre connectivity plan by spring 2019, including proposals for connecting rural and
remote communities. This should ensure that full fibre connectivity is available to
15 million homes and businesses by 2025, 25 million by 2030 with full coverage by
2033. To achieve these targets:
ll Ofcom should promote network competition to drive the commercial
rollout of full fibre, by deregulating where competition is effective
and guaranteeing a fair bet on risky investments before regulating any
uncompetitive areas.
ll Government should part subsidise rollout to rural and remote
communities, beginning by 2020, starting with the hardest to reach areas
and community self-build.
ll Government and Ofcom should allow for copper switch-off by 2025.
ll Government and Ofcom should take action to cut the cost of full fibre
deployment including:
–– Government should ensure the processes for obtaining
wayleaves and connecting new builds are the same for digital
infrastructure as other utilities by 2019.
–– Local government should designate ‘digital champions’ to
improve telecoms processes such as street work permissions and
access to publicly owned assets.
–– Ofcom should monitor the accessibility of Openreach’s duct and
pole infrastructure by levels of usage.
2. Low cost, low carbon

The Commission recommends that government should set out a pipeline of pot
1 Contracts for Difference auctions, to deliver at least 50 per cent renewable
generation by 2030, as part of the transition to a highly renewable generation mix.
Government should:
ll Move technologies that have recently become cost competitive, such as
offshore wind, to pot 1 following the next Contracts for Difference auction
in Spring 2019. Pot 1 should be used for the overwhelming majority of the
increase in renewable capacity required.
154
ll Publish indicative auction dates and budgets for the next decade by 2020.
ll Over time take whole systems costs into account in Contracts for
Difference auctions, as far as possible.
ll Consider whether there is a case for a small-scale, pot 2 auction in the
2020s, if there are technologies which are serious contenders for future
pot 1 auctions.
ll Not agree support for more than one nuclear power station beyond
Hinkley Point C, before 2025.
The Commission recommends that government needs to make progress towards
zero carbon heat:
ll Establishing the safety case for using hydrogen as a replacement for
natural gas, followed by trialling hydrogen at community scale by 2021.
ll Subject to the success of community trials, launching a trial to supply
hydrogen to at least 10,000 homes by 2023, including hydrogen
production with carbon capture and storage.
ll By 2021, government should establish an up to date evidence base on the
performance of heat pumps within the UK building stock and the scope
for future reductions in the cost of installation.
ll Set a target for the rate of installations of energy efficiency measures in
the building stock of 21,000 measures a week by 2020, maintained at this
level until a decision on future heat infrastructure is taken. Policies to
deliver this should include:
–– Allocating £3.8 billion between now and 2030 to deliver energy
efficiency improvements in social housing.
–– Government continuing to trial innovative approaches for
driving energy efficiency within the owner occupier market.
–– Government setting out, by the end of 2018, how regulations
in the private rented sector will be tightened and enforced
over time.
The Commission recommends that government should set a target for recycling
65 per cent of municipal waste and 75 per cent of plastic packaging by 2030.
Government should set individual targets for all local authorities and provide
financial support for transitional costs. The government should establish:
ll Separate food waste collection for households and businesses (to enable
production of biogas) by 2025.
ll Clear two symbol labelling (recyclable or not recyclable) across the UK
by 2022.
ll A consistent national standard of recycling for households and businesses
by 2025.
155
ll Restrictions on the use of hard-to-recycle plastic packaging (PVC and

polystyrene) by 2025.
ll Incentives to reduce packaging and for product design that is more easily
recyclable by 2022.
ll A common data reporting framework for businesses handling commercial
and industrial waste by the end of 2019, ideally through voluntary
reporting but if necessary by legislation.
3. Revolutionising road transport

The Commission recommends that government, Ofgem and local authorities
should enable the roll out of charging infrastructure sufficient to allow consumer
demand to reach close to 100 per cent electric new car and van sales by 2030.
Government should address the implications of technological innovation in long
term transport planning processes, including the next rail control period and road
investment strategy.
ll Ofgem should take on the role of regulating the interaction between
electric vehicle charge points and the electricity network immediately,
ensuring that electric vehicle charging and vehicle to grid services
contribute to the optimisation of the energy system. Government,
industry and Ofgem should work together to set minimum standards for
a network of interoperable, smart charge points.
ll Ofgem should commission electricity network operators to work with
charge point providers to identify potential anticipatory investments
required to accommodate public charging infrastructure. Opportunities
for investment within the current price control period should be
identified by Summer 2019.
ll Government should place a requirement on local authorities to work
with charge point providers to allocate 5 per cent of their parking spaces
(including on-street) by 2020 and 20 per cent by 2025 which may be
converted to electric vehicle charge points.
ll Government should subsidise, by 2022, the provision of rapid charge
points in rural and remote areas, where the market will not deliver in the
short term.
ll Government should establish a centre for advanced transport
technology in the Department for Transport to bring together work on
technological innovation and ensure its implications are central to future
investment proposals. This should include developing and overseeing the
Commission’s proposed connected and autonomous vehicles framework.
156
4. Transport and housing for thriving city

regions
The Commission recommends that government should make £500 million a year of
funding available from 2025/26 to 2034/35 for local highways authorities to address
the local road maintenance backlog.
The Commission recommends that cities should have the powers and funding
they need to pursue ambitious, integrated strategies for transport, employment
and housing.
ll By 2021, metro mayors and city leaders should develop and implement
long term integrated strategies for transport, employment and housing
that will support growth in their cities.
ll By 2021, government should ensure city leaders have the right powers to
deliver these integrated strategies, including the power for metro mayors
to make decisions on major housing development sites.
ll Government should set out devolved infrastructure budgets for individual
cities for locally determined urban transport priorities in line with the
funding profile set out by the Commission. Budgets for 2021-2026 should
be confirmed by mid 2019. Government should pass legislation, by 2020,
requiring cities to be given regular five year infrastructure budgets.
ll Government should allocate significant long term funding for major
capacity upgrades in selected growth priority cities, in line with the
funding profile set out by the Commission. Cities benefiting from major
projects should make commitments on housing delivery and provide at
least 25 per cent of funding. Priority cities should be identified by mid
2019, with long term investment commitments agreed by 2020. Future
rounds should take place no more than twice a parliament.
5. Reducing the risks of drought and flooding

The Commission recommends that government should set out a strategy to deliver
a nationwide standard of resilience to flooding with an annual likelihood of 0.5 per
cent by 2050 where this is feasible. A higher standard of 0.1 per cent should be
provided for densely populated areas where the costs per household are lower. To
deliver the strategy:
ll By the end of 2019, government should put in place a rolling 6 year
funding programme in line with the funding profile set out by the
Commission. This should enable efficient planning and delivery of
projects and address the risks from all sources of flooding.
ll The Environment Agency should update plans for all catchments and
coastal cells in England before the end of 2023. These should identify how
risk can be managed most effectively using a combination of measures
157
including green and grey infrastructure, spatial planning and property

level measures.
ll Water companies and local authorities should work together to publish
joint plans to manage surface water flood risk by 2022.
ll The Ministry of Housing, Communities and Local Government and
planning authorities should ensure that from 2019 all new development
is resilient to flooding with an annual likelihood of 0.5 per cent for its
lifetime and does not increase risk elsewhere.
The Commission recommends that government should ensure that plans are in
place to deliver additional supply and demand reduction of at least 4,000 Ml/day.
Action to deliver this twin-track approach should start immediately:
ll Ofwat should launch a competitive process by the end of 2019,
complementing the Price Review, so that at least 1,300 Ml/day is
provided through (i) a national water network and (ii) additional supply
infrastructure by the 2030s.
ll The Department for Environment, Food and Rural Affairs should set
an objective for the water industry to halve leakage by 2050, with
Ofwat agreeing 5 year commitments for each company (as part of the
regulatory cycle) and reporting on progress.
ll The Department for Environment, Food and Rural Affairs should enable
companies to implement compulsory metering by the 2030s beyond
water stressed areas, by amending regulations before the end of 2019 and
requiring all companies to consider systematic roll out of smart meters as
a first step in a concerted campaign to improve water efficiency.
6. Choosing and designing infrastructure

The Commission recommends that government should publish good quality data
on infrastructure costs and performance. All public bodies taking decisions on
strategic economic infrastructure should publish the forecast costs and benefits of
their major infrastructure projects at each appraisal stage and at a suitable point after
completion, by the end of 2019. The Infrastructure and Projects Authority should
work with departments to ensure that costs are comparable between sectors.
The Commission recommends that design should be embedded into the culture
of infrastructure planning, to save money, reduce risk, add value, support
environmental net gain and create a legacy that looks good and works well, by:
ll Government ensuring that all Nationally Significant Infrastructure
Projects, including those authorised through hybrid parliamentary bills,
have a board level design champion and use a design panel to maximise
the value provided by the infrastructure.
158
ll Design panels for nationally significant infrastructure projects having

regard to design principles to be published by the National Infrastructure
Commission based on advice received from the national infrastructure
design group.
7. Funding and financing

The Commission recommends that government should deliver long term certainty
over infrastructure funding by adopting the funding profile set out in the ‘fiscal
remit’ table in Spending Review 2019 and other future spending plans.
The Commission recommends that government should maintain access to
the European Investment Bank if possible. If access is lost, a new, operationally
independent, UK infrastructure finance institution should be established by 2021.
To enable this, government should consult on a proposed design of the new
institution by Spring 2019. The consultation should cover:
ll Functions, including provision of finance to economic infrastructure
projects in cases of market and coordination failures; catalysing
innovation; and acting as a centre of excellence on infrastructure project
development, procurement and delivery.
ll A clear mandate, including sound banking, additionality and having a
wider economic and social impact.
ll Governance to safeguard the operational independence of the
institution.
The Commission recommends that local authorities should be given further powers
to capture a fair proportion of increases in the value of land from planning and
infrastructure provision. To enable this, government should:
ll Remove pooling restrictions on Section 106 in all circumstances, through
forthcoming secondary legislation by 2020.
ll Remove the ballot requirement for upper tier authorities’ powers to levy
a business rate supplement of 2p or less in the pound for infrastructure,
except where the supplement exceeds one third of scheme costs by 2021.
ll Give local authorities powers to levy zonal precepts on council tax, where
public investments in infrastructure drive up surrounding property values
by 2021.
ll Provide greater certainty in compulsory purchase compensation
negotiations by including independent valuations early in the process to
be paid for by the acquiring authority by 2021.
159
160
NATIONAL
INFRASTRUCTURE
COMMISSION

CCS001 CCS0618917350-001 NIC-NIA Accessible-1

Uploaded by

Copyright:

Available Formats

CCS001 CCS0618917350-001 NIC-NIA Accessible-1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CCS001 CCS0618917350-001 NIC-NIA Accessible-1

Uploaded by

Copyright:

Available Formats

NATIONAL INFRASTRUCTURE

The National Infrastructure Commission was established in 2015 to provide

Sir John Armitt CBE

The UK must take decisive action to have world leading

The National Infrastructure Assessment

Thinking long term

How has the Commission come to these conclusions?

How much will this all cost?

The Commission’s recommendations represent a major long term programme

Building a digital society

The UK already has a strong digital economy underpinned by an extensive

Low cost, low carbon

Revolutionising road transport

Transport and housing for thriving city regions

The UK has a programme of major strategic transport projects in the pipeline,

Reducing the risks of drought and flooding

longer time periods, higher standards might be achievable. Densely populated

Choosing and designing infrastructure

Funding and financing

Northern Ireland, Scotland and Wales

Sector covered by the Devolved administration responsibility

Transport Largely devolved Devolved responsibility Devolved, aside from rail

Table 1: Devolved administration responsibilities, by infrastructure sector

A FULL FIBRE FUTURE

More reliable: Cheaper to run:

The benefits will take time, as full

Competition is the best way to get full

But government support will

THE COMMISSION RECOMMENDS:

A government strategy to deliver nationwide

Ofcom should promote

Sources: DCMS, Ofcom, Prism and Tactis, Frontier Economics

Digital connectivity is now an essential utility, as central

Full fibre for the future

Full fibre Incremental upgrade

Figure 1.2: Historic average UK broadband bandwidth and forecasted future

Potential drivers of future bandwidth demand

Furthermore, a full fibre network still provides several benefits relative to a

A long term strategy for nationwide full fibre

ll a commitment to deregulate in geographic areas where competition is

Reaching rural and remote areas

Completing a nationwide rollout

Improving mobile connectivity

Allowing for copper switch-off

Removing policy barriers

premises below a reasonable cost threshold in rural areas. Infrastructure re-use

LOW CARBON INFRASTRUCTURE

per year for electricity,

The Commission estimates that an electricity system

Renewables need more flexibility to balance variations

Sources of flexibility are Burning natural gas for heating and

THE COMMISSION RECOMMENDS:

At least 50% No more than 1 Pilots to test Buildings which

INCINERATING LESS, RECYCLING MORE

PEOPLE ARE WILLING TO DO THEIR BIT:

BUT THEY FIND THE CURRENT SYSTEM TOO COMPLICATED

THE COMMISSION RECOMMENDS:

Recycling targets: Clearer labelling: Restricting use of Separate food

Sources: Anthesis, Ipsos MORI