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NIC unveils framework to help guide better decision-making on future procurement

Sir John Armitt, chair of the National Infrastructure Commission.

The procurement of infrastructure projects risks being constrained by lack of evidence on long-term investment outcomes and could have strategic implications for the UK’s ability to meet growing demand for infrastructure services and its net zero emissions targets, according to a new report by the National Infrastructure Commission (NIC).

The NIC says the lack of a strong evidence base on infrastructure procurements has led to the focus on a single measure of performance, usually short-run cost. As a result, it claims that future procurement decisions risk being made on the basis of opinion and judgement, limiting the scope for lessons to be learned to improve future practice.

Launching a framework to assess private financing and traditional procurement, the NIC said the public sector must do more to understand the benefits and downsides of different procurement options and improve its project data management. Doing so, they say, will also address existing concerns about transparency and public accountability and improve the public sector’s chances of securing the private financing UK infrastructure will need up to 2050.

The NIC say their proposal for an analytical framework infrastructure for whole-life evaluation came out of the National Infrastructure Assessment. It identified the need for a better understanding of the costs and benefits of private financing and traditional procurement in the delivery of publicly funded infrastructure projects

The resulting framework, tested in partnership with Highways England, aims to ensure that government selection of infrastructure procurement models is made with a robust consideration of broader factors beyond cost, including:

  • Asset build quality and condition;
  • Quality of service;
  • Wider outcomes, including social and environmental factors;

Sir John Armitt, NIC chair, said: “30 years ago, the UK led the way in infrastructure financing and, with PFI and PF2 off the table, recapturing that innovative spirit is vital. But without an objective way to determine value, officials risk making decisions with one hand tied behind their back.

“Transforming the nation’s infrastructure means mobilising private sector investment alongside that of government. It’s imperative we develop the tools to make better decisions about what works and what doesn’t, and address existing concerns about the use of private finance. That requires an honest conversation about the role it plays in supporting our infrastructure investment and the partnership models we need. This framework encourages the public sector to view data differently and ask the right questions to get the best taxpayer deal, whatever the procurement model.”

The NIC will now explore the opportunity to apply the framework in other infrastructure sectors and is encouraging a wide range of government departments, scrutiny bodies, operators and investors to adopt and apply the framework.

Click here to download the NIC’s framework to assess private financing and traditional procurement.