Chair of the National Infrastructure Commission (NIC) Sir John Armitt has written to Chancellor Rishi Sunak calling for the creation of a UK bank with an explicit focus on infrastructure as a domestic replacement for the European Investment Bank.

Writing to the Chancellor last week, Armitt emphasised the the need for long-term infrastructure planning alongside short term stimulus measures to help build confidence in the economy.

His letter, sent last week, acknowledges that measures are available to stimulate demand in parts of the economy – such as accelerating the national rollout of gigabit broadband and work to make homes more energy efficient.

However, he also stressed that it was crucial not to lose sight of the long term, saying:

“The economy runs on confidence, and government has a critical role to play in instilling this among investors, businesses and consumers.”

According to Armitt confidence can be won, and crucially private investment can be unlocked, by government setting out a long-term infrastructure strategy and continuing with front-end planning for longer-term schemes – even if any construction work is some years away.

He also said that while significant public investment will be necessary, private capital is critical to infrastructure in many sectors.

The NIC Chair said that clear guidance on the direction of policy and regulation, supported appropriately with public money for R&D and pilot projects, would stimulate private infrastructure investment.

In his letter, Sir John suggests a number of immediate priorities and specific areas where the Commission would support early action.

• Renewable energy - Building a strong pipeline of Contract for Difference auctions – to bring forward offshore, onshore and solar power generating capacity –  described as a potential ‘quick win’.
• Flood resilience - The adoption of national standards of flood resilience to maximise the effectiveness of committed public expenditure (including the recent additional boost announced in March’s Budget) and ensure preparedness for future events.
• Major cities - Continue with the Chancellor’s stated agenda to give the leaders of the UK’s larger cities the funding and freedom they need to start work on their local infrastructure priorities
• Urban public transport investment – includes the need to starting to plan now for the transformative new projects and key to supporting future economic growth and levelling up the country.
• Regional connectivity - The need to boost the connectivity of towns and cities outside the south east of England, to reduce regional inequalities

Sir John notes in his letter that many of the themes were explored in the Commission’s National Infrastructure Assessment, published in July 2018.

The government has committed to respond to the Assessment formally with a National Infrastructure Strategy later this year.

The NIC is also planning to publish detailed studies over the coming months on how infrastructure systems might be better prepared for shocks – using an evidence base which predates the current crisis.