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Last edited 01 Sep 2021
The policy changes needed to ensure a successful recovery from Covid-19
The independent Covid Recovery Commission recently launched its final report – Ambition 2030: A Partnership for Growth – arguing for a National Prosperity Plan and stronger collaboration in design and delivery of policy between government, businesses and citizens.
This is needed to ensure the UK could emerge from the Covid crisis with a society and economy that is stronger, fairer and more resilient. One of the key areas of focus was policy around infrastructure: to ensure that the UK develops physical, digital and community infrastructure that is truly world-class.
The commission was set up in July 2020 by a set of the UK’s most senior business leaders and supported by leading policy experts, academics, and regional and sub-national politicians. In its final report in April 2021, the commission set out its view that the government, business and society must come together to create a National Prosperity Plan to deliver this ambition.
As a contribution to that, the commission put forward a series of policies that could form part of this plan. It focussed on innovation, skills, net zero, infrastructure, and the resilience of people and communities.
That means a refresh of how policy is delivered is needed, with locally tailored solutions used to tackle several of the key challenges facing the country, and government working more closely in collaboration with purpose-led businesses.
The policy recommendations and approaches discussed in the report are built to support five immediate national imperatives. These include creating at least one new, globally competitive industry cluster in every region and nation of the UK by 2030 and developing a 15-year pathway to the decarbonisation of the housing stock.
Throughout the course of work and our extensive discussions with policymakers, experts, and business representatives, the importance of the UK’s infrastructure in delivering ‘levelling up’, net zero and a globally competitive economy was a consistent theme.
The UK economy has a number of competitive strengths compared to others, however, many parts of our physical and digital infrastructure lag substantially behind our competitors, with our road connectivity and number of households with full-fibre subscriptions ranking 20th and 79th, respectively.
The problems with the UK’s level of investment, as well as failure to deliver the right projects at the right time while delivering value for money, were frequently raised by stakeholders as being responsible for this state of affairs.
The overall effect of this is to harm the UK’s connectivity, internally and with other countries. This reduces opportunities for innovation, which is central to the ‘value added’ growth the commission identifies as vital to creating prosperity.
Furthermore, better infrastructure is needed to ensure that all parts of the country can take advantage of the opportunities afforded by a thriving economy, as well as creating the links between households and neighbourhoods that allow strong and resilient communities to take root.
The commission's report is a contribution to a debate, and we do not pretend to have every definitive answer to these and other long-running problems facing British society. For our part, our recommendations for the government include:
- Investing at least 1.2% of GDP in infrastructure every year – with any underspend ringfenced and devolved for investment by sub-national bodies. This is to make up for historic (pre-2014) underspending on infrastructure in the UK compared to similar countries.
- Creating a Government Consulting Service – a social purpose company owned by government with a remit to use government procurement and major project delivery to support the National Prosperity Plan. This would build on good work to date by the Infrastructure and Projects Authority and Crown Commercial Service.
- Giving the National Infrastructure Commission (NIC) statutory underpinning – in order to protect it from abolition by governments of the future and improve its independence.
- Developing Local Prosperity Partnerships – refocussing the work of LEPs to lead and drive forward the collaboration between local government, businesses and citizens that will be needed to deliver world class infrastructure and the decarbonisation homes and commercial buildings.
One crucial area is skills – the introduction of Individual Learner Accounts to support lifelong learning for every adult over the age of 25 and reform of the Apprenticeship Levy will help to unlock investment in the technical education that will be needed to address forecast skills shortages in key areas such as STEM, management, and digital.
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This article originally appeared on the ICE Infrastructure Blog, published on 27 May, 2021. It was written by guest blogger Matthew Oakley, the Director of WPI Economics, which conducted research for the independent Covid Recovery Commission.
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