UK: Planning Act 2008 Blog 236: CBI Adds Its Voice To Infrastructure Concerns

Last Updated: 3 May 2011
Article by Angus Walker

This is entry number 236, published on 27 April 2011, of a blog on the Planning Act 2008 infrastructure planning and authorisation regime. Click here for a link to the whole blog. If you would like to be notified when the blog is updated, with links sent by email, click here.

Today's entry considers a report from the Confederation of British Industry on low-carbon infrastructure.

The Confederation of British Industry (CBI) published a report yesterday expressing its concern that the UK's transition to a low-carbon economy needs boosting, echoing that of the British Chambers of Commerce last week. The report can be found here, but here is a summary.

The CBI commissioned Accenture to interview businesses about planning and investment. They concluded that the money is there to invest, but investment is not sufficient because:

  • pensions funds, who have the money, invest indirectly through utility companies;
  • banks are unwilling to lend money for the 6-7 years required; and
  • low-carbon technology is seen as a risky investment, partly due to unpredictable policy-making.

The government's current consultation on reducing feed-in subsidies for larger solar projects, currently being challenged in the courts by a consortium of solar power companies, is given as an example of the perception of policy being unstable.

Nevertheless, the outlook was not entirely bleak. The government should be able to reduce investor risk (cheaper than increasing returns). The government needs to express a low carbon vision - expected in a forthcoming 'green energy roadmap' - get electricity market reform right, and stabilise its energy policies.

Planning and consenting

On planning, the report is cautious about the Localism Bill, saying that it ought to help rather than hinder infrastructure projects. Although not explicit, this is no doubt a reference to fears that giving planning powers to small local groups may make the delivery of nationally significant projects more difficult.

I would add that the Localism Bill is an opportunity to streamline the consent process further. Although it makes some welcome changes, there are more that could be made to allow further consents to be combined into a single application.

The report calls on the government to clear the backlog of energy project applications that have been made to the them but not yet decided. These are the 30 or so applications that pre-date the Infrastructure Planning Commission (IPC), which started to receive applications on 1 March 2010, listed on this page. Had they been made to the IPC, more or less all of them should have been decided by now, given the statutory timetable for doing so that now exists.

The report says that the IPC should continue to consider and decide applications until it is replaced by the Major Infrastructure Planning Unit (MIPU). That is of course vital, but I suggest it is missing the point somewhat. Only two applications have been made to the IPC in the 14 months of its existence, so handling those should not be a problem. It is the lack of further applications being made that needs to be addressed urgently.

The IPC has had over 50 projects listed on its website as in the pipeline for over a year, but all but two are still in the pipeline. Why? Here are some suggestions.

National Policy Statements

No National Policy Statements have been finalised since first being published nearly 18 months ago. Although these are supposedly merely expressions of existing policy, they will go a long way towards addressing the policy stability issues referred to above. Despite the recommendations of the Energy and Climate Change Select Committee, these should be finalised ('designated') as soon as possible.

IPC/MIPU transition

Uncertainty about the IPC/MIPU transition, expected on 1 April 2012 (depending on Localism Bill progress in Parliament) is making promoters wait. Although the government has stated that the transition will be seamless, it needs to emphasise this more publicly.

Rejection of and changes to applications

Project promoters are reluctant to make applications given that (a) they may not even be accepted for consideration and (b) they may be refused later because they can't be changed to cure the reason for refusal. The IPC should issue advice and/or an open invitation to check application documents for compliance in advance and should be clearer about the circumstances in which it will allow changes to applications to be made. In the end it comes down to certainty: promoters should be as certain as possible in advance whether their applications will be accepted, and then whether they will be granted.

Ask them

Finally, there are currently 54 projects at the pre-application stage, all with contact details, and the IPC should have records of application dates that have been put back. The government should investigate what barriers are holding these promoters back from making their applications.

Previous entry 235: Business Infrastructure Commission seeks further planning reforms

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Angus Walker
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