Infrastructure Investment Plan: a framework, a delivery plan or a consultation?

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The Scottish Government published its draft Infrastructure Investment Plan for Scotland 2021-2022 to 2025-2026 on 24 September 2020.  As the title suggests, this is a draft plan, currently out for consultation.  The consultation period runs until 19 November 2020.  Once agreed, the new infrastructure investment plan (IIP) will replace the previous infrastructure investment plan, which was published in December 2015.

The IIP combines elements of a decision-making framework, a plan for future investment and a consultation.  Let’s look at those three in turn.

A framework for decision-making…

Much of the IIP is devoted to setting out the broad framework within which future decisions on infrastructure should be taken.  The IIP identifies linkages with a number of existing Scottish Government plans and initiatives, including:

• The Infrastructure Commission, which stressed the need for infrastructure investment that supports an inclusive net zero carbon economy.

• The National Infrastructure Mission, which aims to increase Scotland’s annual infrastructure investment until it is £1.5 billion higher by the end of the next Parliament than in 2019-20.

• The investment that will be funded by the Scottish National Investment Bank, which has a primary focus of supporting investment that will contribute to Scotland’s transition to net zero carbon emissions.

The IIP sets out strategic themes, long-term trends, performance frameworks and hierarchies that will inform future investment decisions. 

The plan is centred around three strategic themes:

• enabling the transition to net zero emissions and environmental sustainability
• driving inclusive economic growth
• building resilient and sustainable places.

The plan also identifies three long-term trends that are considered to impact on the provision of infrastructure:

• climate change
• technological developments
• demographic change.

The document sets out detail on how the IIP responds to the recommendations of the Infrastructure Commission and how the IIP complements the National Performance Framework and the UN Sustainable Development goals. 

The IIP also includes a proposed ‘Investment Hierarchy’, which places an emphasis on maintenance of existing assets in preference to new build:

All this makes for quite a complex matrix of factors that the IIP suggests will need to be considered in future investment decisions.

…or a statement of future investment plans…

The Plan states that it details “around £24 billion of major projects and large programmes that are ready to be confirmed now”.  For the moment, as might be expected at this stage, this largely comprises broader programmes rather than individual projects.  Details on individual projects will be published as part of the six-monthly Major Capital Projects updates, which include a project pipeline.

Some examples of programmes are given within each of the strategic themes, the largest of which are highlighted below.

As noted in the IIP, the plan covers “those investments the Scottish Government delivers itself or through its own agencies and non-departmental public bodies. It does not cover investments by the UK Government or the private sector, nor by Councils”.

These plans are set out under the three themes identified in the framework, but beyond this it is not clear how these investments fit with the other criteria for investment outlined in the document, such as the Investment Hierarchy or the National Performance Framework.

The Plan covers £24 billion of major projects and programmes, so that would account for much of the £33 billion of Scottish Government investment required by the National Infrastructure Mission over the course of the next Parliamentary term.

…or a consultation document?

The IIP also has a consultative element to it, although the areas for consultation are limited in scope.  The IIP seeks views on:

• whether to extend the definition of infrastructure to include ‘natural infrastructure’, defined as “the environmental resources (e.g. plants, animals, air, water, soils) that combine to yield a flow of benefits to people both now and in the future”
• the investment hierarchy suggested in the Plan, with its emphasis on maintaining and enhancing existing assets over new build
• how to assess the impact of proposed infrastructure
• how to assess the greenhouse gas emissions impact of infrastructure investment
• the accuracy and scope of the Environmental Report published alongside the IIP.

The IIP does not seek views on the infrastructure plans that are set out in the document.  Rather, it states that:

“During the first half of 2019, the Infrastructure Commission undertook widespread engagement on infrastructure priorities. We have already considered the feedback received by the Commission in response to its Call for Evidence. We do not seek to repeat this engagement. The purpose of this consultation is to seek wide-ranging views and feedback on some specific areas around the ways we plan to implement the Commission’s recommendations, to ensure the right final approach.”

So what is it…and what is it not?

The IIP is not a comprehensive, detailed plan for future infrastructure investment over the next five years.  It sets out some broad plans, but further detail will follow in the project pipelines that will be published on a six-monthly basis as firmer plans develop.

It does not set out details on how the infrastructure investment plans will be funded.  This is covered in a separate Capital Spending Review Framework which was published alongside the IIP.  A forthcoming SPICe blog will look at this document in detail.

Neither is it a full consultation on the Scottish Government’s proposals for investment, with the Scottish Government considering that there has already been the opportunity for this wider input as part of the Infrastructure Commission’s work.  It seeks views on some specific, limited areas of the document.

Rather, the IIP is a high-level framework for decision-making, with some broad themes for future investment, within which some future plans are outlined. 

Compared with previous IIPs, this IIP places a much greater emphasis on assessing the environmental impact of infrastructure investment.  In line with scrutiny work by the Scottish Parliament’s Environment, Climate Change and Land Reform Committee (ECCLRC), there is now a legislative requirement for an assessment of an IIP’s contribution to meeting emissions reduction targets.  This IIP is also the first to have an accompanying Strategic Environmental Assessment, again on the back of scrutiny work by ECCLRC.  A separate SPICe blog examines the extent to which the plans identified meet with the Scottish Government’s commitments in respect of climate change and the environment.

Nicola Hudson, Senior Analyst, Financial Scrutiny Unit

Blog image: “Building Site” by Pete Ashton is licensed under CC BY-NC 2.0