Sir Keir Starmer is planning to use private finance to boost Britain’s infrastructure as part of a 10-year strategy to be set out within the first year of a Labour government if it wins power, i has learnt.
According to industry sources, the party has drawn up plans to increase private-sector financing and streamline the planning system for nationally significant infrastructure projects (NSIPs).
NSIPs are large infrastructure projects, which can include the building of large-scale housing, power stations, roads, railways and hospitals. Labour has alerady announced plans to build around four New Towns to provide 1.5 million homes, and in April laid out plans to invest £1.8bn in Britian’s ports.
After consulting industry leaders, Labour hopes its policies would encourage economic growth and motivate businesses to invest in major infrastructure schemes, which have been slowed down by red tape in recent years.
The Labour leader intends to fight his election campaign on the theme of “fixing broken Britain”, saying in his speech after Rishi Sunak announced the snap summer poll that “nothing seems to work any more”.
He said: “After 14 years under the Tories, nothing seems to work anymore. Public services crumbling, ambulances that don’t come, families weighed down by higher mortgage rates, antisocial behaviour on our high streets. The list goes on and on.”
Industry sources told i that Labour has been discussing the potential reforms with industry leaders since January with shadow ministers believing that building more infrastructure in the UK supported by big business would help provide economic growth while subject to tight spending rules.
However, Labour’s work in infrastructure was still being reviewed when Mr Sunak made his surprise election call. The party had intended to set out the policies in the first week of July and not all those being discussed may end up in the manifesto, advisers have been told.
The blueprint includes a pledge to launch a 10-year strategy within the first year of a Labour Government to outline its long-term aims for national infrastructure, focusing on areas including net zero and new emerging technologies.
Relaxing planning rules around what is considered a nationally significant infrastructure project could also be included, as well as allowing metro mayors more powers around planning to streamline the approval of critical infrastructure.
The Tories will argue they are also tackling Britain’s infrastructure.
In April last year the Government laid out its own plans to fast-track planning on NSIPs.
In the introduction to the document Levelling Up Secretary Michael Gove wrote: “Improving energy security, achieving net zero and delivering the transport connectivity, water and waste management facilities this country needs demands investment in infrastructure.
“We must have a planning system fit to deliver it, while keeping communities and the environment at the heart of decision-making.”
The Government produced its NSIP strategy in 2020 in which then Prime Minister Boris Johnson said: “Our roads and our railways and our full-fibre cables join us together as one nation… but our national anatomy is creaking.”
He added that the plan would be backed by “hundreds of billions of pounds of public and private investment”.
And in July last year Prime Minister Rishi Sunak claimed the Government was on track to hit its manifesto commitment of one million new homes in the course of this Parliament.
Construction firms and outsourcers have cautiously welcomed Labour’s plans, telling i they would need to see more detail before they could pass judgement.
“The prospect of a long-term pipeline is good and will be welcomed by industry. It sounds good but currently, what we’ve been told is quite vague – the devil will be in the detail.
“For example, will it give the flexibility required for certain projects, such as in the energy sector?”
One move that might prove controversial is increased use of the private sector funding for major investment projects.
One industry source told i that Labour plans to attempt to “reset” relations between the private and public sector on the existing PFI (Private Finance Initiative) portfolio, and to use existing Government quangos to aid connecting investors with development opportunities in the UK.
This year, reports that schools were unable to cut grass due to prohibitive contracts signed in PFI deals under the last Labour Government, triggered a wave of scepticism from some corners against any return to the use of PFI for major projects.
One arm of Labour’s infrastructure plans was announced at the UK Real Estate Investment and Infrastructure Forum on Wednesday, where Shadow Chief Secretary to the Treasury Darren Jones outlined plans for Labour to combine the National Infrastructure Commission and Infrastructure and Projects Authority into one body called NISTA to combat the “inertia” of infrastructure delivery and report directly to the Treasury and Cabinet Office.
Several industry sources told i this was the “opposite” of what they had hoped Labour would announce.
One industry source said the plan was “bonkers”, as the industry had been pushing for more independence over decisions on big projects, rather than increasing the involvement of politicians.
They said: “Given what we had been expecting, we found the announcement a little bit bonkers. We wanted an independent, OBR-style body that keeps national infrastructure in independent hands to prevent someone like Sunak coming in and undermining over a decade’s worth of planning”.
It comes as Manchester’s Labour mayor Andy Burnham is already considering the help of the private sector to finance a norther rail project
Prime Minister Rishi Sunak has also said the private sector would be able to help finance the HS2 leg to Euston, although tax payer’s cash will be used up front
A Labour source highlighted that the policy had been announced with endorsements from bosses of leading companies including Skanska and Jacobs.
“If Labour want to do something big and bold, increase the certainty of projects. But unless you’re committing pretty radically to reform, it won’t do a bit of good. You’re still going to get judicially reviewed on every project.”
Angela Rayner MP, Labour’s Shadow Housing Secretary, said: “Large-scale housebuilding and strategic planning are the lynchpin of Labour’s first steps to secure economic growth across Britain.
“Labour will jump start planning to build 1.5 million homes and save the dream of homeownership, along with the biggest boost of affordable housing for a generation.
What are NSIPs?
Nationally significant infrastructure projects (NSIPs) are large-scale projects which are considered of such size and importance that they require permission to be given by the Government.
Instead of applying to local authorities for planning permission, these projects must apply for a development consent order (DCO) via the Planning Inspectorate.
The Planning Inspectorate reports to the relevant Secretary of State for the project, who then decides whether to grant consent.
Past examples of NSIPs include:
- Hinkley Point C Power Station – The Government announced in 2010 that it was considering Hinkley Point, Somerset as a site for a new nuclear power station. The planning process for the plant was considered under the NSIP regime. The plan is under construction and is due to be completed by 2031.
- Swansea Bay Tidal Lagoon – the UK Government approved plans in 2015 for a tidal lagoon power plant to be constructed in Swansea Bay but withdrew support in 2018 citing concerns over value for money.
- Thames Tideway Tunnel – plans for a 16-mile super-sewer running between Acton, west London and Hackney, in the east of the capital, were announced in 2016. Construction was completed in 2024, and it is due to become operational in 2025.
- North Doncaster Rail Chord – also known as the Shaftholme Flyover, the North Doncaster Rail Chord is a heavy-freight line allowing freight trains to reach power stations in Aire Valley without using the East Coast Main Line. Plans were first announced in 2011, and the chord was completed in 2014.