TIF WORKING GROUPS
One of the most effective means by which The Infrastructure Forum develops constructive ideas for the future of the sector is through its Working Groups.
These have been established in several policy areas, chaired by authoritative figures in the sector, allowing participants in the Forum to put forward constructive ideas and proposals on a range of detailed issues important to the health of infrastructure in the UK.
In 2020 the Energy Working Group will work towards a number of submissions examining issues including the range of problems that we may face in attaining the decarbonisation target and how the transition to clean energy should be financed.
Under the chairmanship of Julia Pyke, Nuclear Development Director, EDF, the group are undertaking an initiative exploring the opportunities in different energy sub sectors, taking into account climate change options and the fiscal position post-virus, with the aim of equipping government with some informed and constructive ideas drawn from expert market participants.
CCS will be going ahead this decade, but the scale of investment is still uncertain. TIF welcomed Kwasi Kwarteng, Minister for CCS to a presentation in July 2020. This was be very timely in the lead up to the Comprehensive Spending Review in the Autumn, where it is possible more funds will be made available given the importance of CCS to preserving regional jobs.
The Procurement Working Group published its report Sustainable Procurement: A Vision for UK Infrastructure on Wednesday 13 February 2019.
The report has made a series of recommendations to promote greater visibility and stability in the project pipeline and analysis of the industry’s risk exposure to particular contractors, as well as a more economically and socially sustainable definition of value for money. These recommendations will enable an increase in inward investment by contractors in skills and technology.
The Group has examined a number of case studies, including Crossrail, the rebuild of the Dawlish railway line and London 2012, to glean ideas and learn lessons which might prove useful to share with the industry.
The Working Group's latest report, Social Value: Moving on From the Green Book, published in February 2020 highlights the need to provide an effective way of communicating to the public that projects are genuinely adding social value and can be seen to do so throughout the life of the asset, whilst making recommendations on how to do so. These recommendations also aim to improve the monitoring of projects timeliness and budget outcomes which is an important goal in maintaining societies support for major projects.
The Taxation Working Group’s longstanding representations on tax relief to incentivise capital investment were recognised by the Chancellor's Spring Budget announcement of new capital allowances for structures and buildings. The Group submitted its response to the draft legislation on Tuesday 23 April 2019, emphasising the themes of certainty, fairness and simplicity as central to the successful delivery of the legislation.
The Working Group reconvened under the chairmanship of Graham Wright, Tax Partner at EY, in January 2020 to consider areas of the UK tax system that limit investment in infrastructure and develop proposals to improve the current tax environment ahead of the Spring Budget 2020.
The group met via videoconference on 20 May 2020, focusing on tax ideas and policy suggestions for the medium and longer-term to promote investment and resilience in UK infrastructure. The group also took the opportunity to consider some of the ongoing HMRC consultations.
The Forum set up a Working Group to respond to HM Treasury’s Infrastructure Finance Review drawing on its considerable research on the role of the European Investment Bank in the UK, alternative models for funding and financing infrastructure, and existing mechanisms through which HM Treasury could boost private finance into UK infrastructure. More details will be available on this new Working Group in due course.
The National Infrastructure Commission has been tasked by HM Treasury with a review of the UK’s regulatory environment for infrastructure delivery with specific regard for future investment needs, promoting competition and innovation, and meeting the needs of consumers.
The Infrastructure Forum will be consulting a Working Group, bringing together cross-sector experts from the Forum’s network, on how the regulatory environment could be enhanced to encourage investment in and improve the delivery of infrastructure. This work will culminate in a submission to the call for evidence for this Inquiry.
REGULATED ASSET BASE
The Infrastructure Forum has setup a Working Group charged with analysing the potential benefits behind an innovative expansion of RAB based financing models. Mike Gerrard, Chair of INPP and formerly of Thames Tideway, chairs the RAB Working Group comprised of infrastructure finance experts.
As the whole of government is considering the way forward for funding and financing infrastructure projects, particularly in the context of meeting Net-Zero objectives, this is a valuable opportunity to influence government thinking on structuring the RAB model to deliver infrastructure projects cost effectively.
The RAB Working Group set out its ideas for an innovative expansion of the RAB model in latest report, Regulated Infrastructure Investment, submitted in January 2020. The report examined the RII model, an updated financing model that has learnt from both the failures of privatisation and PFI and the successes of TTT. The report concludes that the RII model could play an important role in delivering the next generation of infrastructure investment and is capable of delivering a new infrastructure investment revolution.