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CN Briefing: National Infrastructure Pipeline; Treasury; public spending; Northern Powerhouse

Nine months in government can make a big difference.

The government has had plenty of crises and issues to deal with in that time – not least steel, which continues to rumble on – but the Treasury has still found time to update the National Infrastructure Pipeline, nine months after the previous edition last summer.

This latest update brings some significant changes, particularly when it comes to public and private funding of infrastructure projects.

Last July, only two months after the Conservative government took office, the Treasury had committed to backing 211 infrastructure projects with public money – or 35 per cent of all projects in the NIP.

Fast forward to April 2016 and there has been a dramatic shift: the updated infrastructure plan shows 55 per cent of all projects will be publicly funded, or 335 of the 606 projects in the total pipeline.

It’s a significant change and certainly suggests the government is looking to take action to make infrastructure projects happen.

The private sector has often been leaned on to get infrastructure projects started. But with uncertainty commonplace and the global economy ever more volatile, the public sector’s larger role has been broadly welcomed.

Public money will be all the more important for infrastructure investment in areas outside London that have struggled to attract private funds.

Mace’s Steve Gillingham has highlighted the Northern Powerhouse as a crucial area for the government to tackle.

Interestingly, however, he argues that it isn’t always about making “heaps of new money” available, but that devolution can play a major role in channelling funds into priority infrastructure across the regions.

But, as is usually the case with any data-dump from the Treasury, the NIP update isn’t all good news.

Three new nuclear projects – Hinkley Point C, Moorside and Wylfa – have all been pushed back in the pipeline, with works at Wylfa and Moorside both delayed to beyond 2020/21.

These have had an impact on forecasts; without works at Wylfa, the CITB has cut its annual output forecast for Wales from 7 per cent between 2016 and 2020 to 3.7 per cent over the same period.

A number of projects have also increased significantly in cost since the previous update – one notable example being the BHEG energy-from-waste project in Walsall, which has increased by £53.7m – more than a third – to £196m.

Despite these various delays and hikes, however, the response has been largely positive.

Writing for Construction News, parliamentary secretary at the Cabinet Office, Lord Bridges, says the government’s door is “always open” when it comes to helping the industry cut red tape.

Combined with the increased public funding in the NIP, it’s starting to seem like the government is listening to the industry when it comes to infrastructure.

Get the full analysis of what the NIP update could mean for you.

In the news

It’s not all good news for infrastructure, with hundreds of jobs at risk in Teesside after energy giant Air Products pulled the plug on two EfW plants.

Deep diving into data: don’t miss CN’s in-depth analysis of the data centres market, which is set to hit £1.14bn by 2020. Here’s everything you need to know about this up-and-coming part of the industry.

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