Does the National Infrastructure Commission still have teeth?

Last week, the government announced the National Infrastructure Commission would no longer have its independent status enshrined in law. Does the body still have teeth, Lee Baker asks.

Infrastructure: government has announced that NIC will be 'permanent'
Infrastructure: government has announced that NIC will be 'permanent'

Pinching an idea from the Labour Party's election manifesto, former chancellor George Osborne last autumn announced the creation of the National Infrastructure Commission (NIC). He said the commission would "hold (ministers') feet to the fire" over long-term infrastructure planning. It would independently assess national infrastructure needs for the next 30 years, and, with ministerial endorsement, its recommendations would become material considerations in planning decisions. It would also monitor the progress of infrastructure delivery.

Osborne said he wanted to make the NIC an independent, non-departmental body with a role laid down in law. Ministers vowed to legislate, and said that a move to make the commission statutory would be contained in the Neighbourhood Planning and Infrastructure Bill, as it was then known. However, when the bill was published last month, the infrastructure element had been dropped from the name and the contents, prompting dismay among many in the sector.

Last week, the Treasury revealed the revised plans for the NIC. It announced that the body would not be statutory, but would instead become an executive agency from January 2017. The Treasury also published a charter saying the commission "will operate independently, at arm's length from government", describing it as "a permanent body which will provide the government with impartial, expert advice".

New chancellor Philip Hammond said the commission would be "at the very heart of our plans to ensure Britain's infrastructure is fit for the future", adding: "It will independently define our long-term infrastructure needs and help prioritise, plan and ensure value for money." The Treasury said that Sir John Armitt, who led the initial Labour Party review that recommended the commission's creation, has become interim deputy chair of the NIC, working with interim chair Lord Adonis. Before publication of the revised plans, the government had given the commission assurances about its short-term funding future, agreeing an annual budget of £5 million up to 2020.

However, some in the sector are still not happy. Environmental think tank E3G said in a statement that executive agencies are accountable to their parent department, unlike independent statutory bodies. The NIC, it said, would now have "fewer powers, diminished independence, and will not be answerable to Parliament". Sepi Golzari-Munro, the head of E3G's UK programme, said: "The NIC is being set up to fail. The decision risks undermining its credibility and ability to offer independent advice. It signals that this government is unwilling to put itself under effective independent scrutiny."

But former Conservative transport minister and National Infrastructure Planning Association council chairman Steve Norris says the move is understandable. "If you made the NIC an entirely independent statutory body, it would effectively be a stick with which to beat the government," he says.

"No Treasury of any political colour is going to permit being told how to spend its money. I therefore wasn't surprised that the new administration wanted to keep the NIC, but decided that a better solution was to make it an agency. The significance of what the NIC can offer is recognised, but it will be an advisor to the government, not a dictator."

Robbie Owen, head of infrastructure planning at law firm Pinsent Masons and a member of the NIC expert advisory group, says the key difference is around permanence. It is easier to abolish an executive agency, he says; winding up a statutory body would need to be approved by Parliament.

Owen had wanted the commission to be statutory "to provide advice without any fear of closure" and to prevent its judgements being influenced by the government of the day. He wonders if the new administration's change of heart stemmed from "fear over what the commission might have recommended".

However, he believes the executive agency model should be given a chance. "It will have to prove itself in terms of the authority and independence of its reports," he says. "The government will have to prove that it doesn't have its hand on the commission's pen."

Commentators say that the commission has already, in its current non-statutory role, carved out a role for itself, having published a number of reports and started work on its first National Infrastructure Assessment, a 30-year strategy outlining the country's infrastructure needs and how they can be met. "The commission has functioned to date and has had an impact," said the Planning Officers Society's infrastructure specialist Michael Wilks, speaking before last week's announcement. "The concern is over its permanence."

Armitt, the commission's interim deputy chair, acknowledges concerns about its long-term existence in the absence of legislation. But he is positive about the new charter. "The government has gone out of its way to emphasise our independence," he says, "and ministers are obliging themselves to respond to us in a full and timely fashion." He also welcomes the fact that day-to-day reporting lines for commission staff are to the NIC chair, not to ministers.

The key issue, he says, will be how the government behaves. "Even if the commission were a statutory body, it would not stop the government from dragging its feet." But he says the present approach of ministers in relation to the NIC is "absolutely the right one," adding: "Infrastructure is clearly a focus and they want to be seen to be taking this seriously."

Where does this leave the evidence produced by the NIC's National Infrastructure Assessment and its influence over planning decisions? Wilks believes that ministerial statements made in response to evidence-based recommendations from the non-statutory NIC will carry weight in planning decisions. "There's no reason why ministers cannot formally respond, and that would be a material consideration," he says.

The previous administration's proposal that NIC recommendations endorsed by ministers would take precedence over adopted national policy statements had been criticised for ignoring due process. Speaking before last week's announcement, barrister Michael Humphries QC argued that this problem would be eased if the commission was not a statutory body: "This potential challenge disappears," he said, "because the commission's recommendations, even if endorsed, have no statutory status."

While some suggest that this would make for a simpler system, others are concerned that a non-statutory NIC will lack teeth and have a limited ability to carry out its central purpose. Before the latest announcement, Owen had argued that the NIC needed to be statutory so it could require information from regulators, public bodies and government departments. "We need to see whether these bodies co-operate with the commission as an executive agency," he now says. Humphries adds: "There is no obvious reason why government would obstruct its own organisation from trying to help it."

More fundamentally, will the commission become a creature of government, or, as originally envisaged, an arms-length body able to make impartial long-term recommendations? "The proof will be in the pudding," says Owen. "The commission is certainly capable of operating independently but executive agencies can be subject to interference."

NATIONAL INFRASTRUCTURE COMMISSION TIMELINE

September 2013: Following a review set up by the Labour Party and led by Sir John Armitt, a report recommends that an independent National Infrastructure Commission (NIC) be created to improve infrastructure planning.

October 2015: Then Conservative chancellor George Osborne announces an independent NIC to offer "unbiased analysis of long-term infrastructure needs".

January 2016: The Treasury launches a consultation, which suggests placing the NIC on a statutory footing.

March 2016: The NIC makes its first recommendations, backing the High Speed 3 and Crossrail 2 rail lines and "a smart power revolution".

May 2016: The Treasury says in its consultation response that it will legislate "at the earliest opportunity" to make the NIC statutory.

September 2016: Plans to make the NIC statutory are dropped from the Neighbourhood Planning Bill and the Treasury confirms that statutory status will not be granted in 2016/17.

October 2016: The Treasury announces that the NIC will instead become an executive agency from January 2017

Spring 2017: NIC recommendations on housing and jobs growth in the Cambridge-Milton Keynes-Oxford corridor and 5G digital communications due.


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