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.
The Energy Working Group met on Tuesday 9 April 2019 on the theme of ‘Investing in Energy: The Next Issues’. This was the first in a series of meetings examining the investment environment for the delivery of infrastructure to meet increasing supply demands and the changing uses of energy. The Group will work towards a submission highlighting potential barriers to investing in the sector and produce recommendations on this basis.
The Group will invite Joanna Whittington, Director General, Energy and Security at the Department for Business, Energy and Industrial Strategy, to its next meeting. The discussions will centre around how government and the industry can work together to ensure the forthcoming Energy White Paper has a positive and supported landing in the sector.
In October 2018, the Group submitted its response to the National Infrastructure Commission’s National Infrastructure Assessment (NIA) on the recommendations for the future of the UK’s energy supply mix. The response outlined that the UK should pursue a more balanced model, utilising renewable, nuclear and natural gas to ensure the stability of the UK energy supply and foster investment in these technologies across the board.
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 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 Forum will be setting 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.