Lack of independence makes infrastructure group ‘vulnerable’, Lords committee hears

The National Infrastructure Commission’s lack of statutory independence weakens its ability to challenge government, the infrastructure chief at KPMG told a House of Lords committee on Tuesday. 

The commission, which is responsible for providing expert advice to government of UK infrastructure challenges, was initially proposed as an independent body by former chancellor George Osborne, but was ultimately set up as an executive agency of the Treasury by his successor Philip Hammond. 

At the start of the Lords built environment committee’s inquiry into infrastructure policymaking and implementation in central government, KPMG’s Richard Threlfall praised the body’s work but said it “remains vulnerable because of its lack of statutory independence”. 

“It seems inevitable that it is less robust in its challenge to government than it would be if it was on that basis,” he added. 

The firm’s global head of infrastructure, government and healthcare said the Infrastructure Forum, whose advisory council he chairs, had at the time “made a very strong argument” that the NIC should be modelled on the Office for Budget Responsibility. 

“I guess there was a political decision taken at the end of the day that they did not want to go down that route,” he said. 

Threlfall also suggested that the NIC’s current remit – which limits it to proposing interventions amounting to between 1% and 1.3% of GDP until 2055 – should be removed. 

He said: “They should be asked to look at the benefit of investments regardless of the fiscal envelope required, because that would push the debate as to whether we should be investing more in our infrastructure or not”. 

In a wide-ranging discussion with peers, Threlfall also addressed the question of whether there should be “a responsibility somewhere in the heart of government for looking across infrastructure as a whole” and taking “difficult decisions about which projects to stop and delay when they seem to be off track”. 

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Discussing the lack of high-level co-ordination between government departments in national infrastructure planning, he explained how institutions such as the NIC and the Infrastructure Projects Authority typically rely on bilateral relationships with departments.  

“In practice, projects [that] get put on the list – sometimes 20 years ago – gradually gravitate up to the top through a department like transport of BEIS and the decision about whether they go ahead or not basically gets taken there […] there is no infrastructure minister, there is no infrastructure department, that system of systems department isn’t happening anywhere in the country at all,” he said. 

Threlfall said his preference was not for a new minister, but a more organised system of “collective responsibility”. 

“If there was to be a ministerial committee that brought together all the ministers that had big infrastructure responsibilities, then you could start to look at infrastructure as a whole”. 

While he said that major infrastructure was being handled better than when he was a civil servant more than twenty years ago – when there was “no proper system” – he said the reforms introduced since had become “more and more bureaucratic”. 

“The volumes of paperwork that is being put in in support of major schemes has quadrupled in the period since the system was first launched, so everyone is getting drowned in paperwork, which in turn is slowing down the ability of government to respond quickly enough,” he said.