By John Sinfield; Managing Director (Knauf Insulation Northern Europe)
The Pyramids? Hadrian’s Wall? Those carved stone heads on Easter Island perhaps? More recently; the Hoover Dam or the London Sewerage System? They are options on the exotic end of the scale. More mundane answers might be our power stations and networks, transport links, hospitals, schools and offices. Prisons even. Also our military bases, the Houses of Parliament and the financial heart of London. If they’re possible answers, what’s the question? For those that haven’t guessed; ‘What can be defined as National Infrastructure’?
Apologies for the anticlimax but it is an important question. Being classed by Government as an infrastructure priority area opens up a host of options; from the chance to use the Government’s balance sheet to access cheaper borrowing, to the opportunity to make your case to Treasury bean counters as the beans are being handed out! The economics dictionary has the following infrastructure definition;
‘… the stock of fixed capital equipment in a country, including factories, roads, schools etc, considered as a determinant of economic growth’…
As far as current projects go, this Government has shown a preference for a faster journey to Birmingham and offshoring billions to France in pursuit of a nuclear power plant. Generally the decision making process on infrastructure priorities has appeared haphazard, opaque and politically partisan prompting the Labour party to commission the Armitt Review. The review is currently open to consultation and includes a recommendation to set up a ‘National Infrastructure Commission‘ which would be licensed to look at project viability 25 – 30 years in to the future. What decision making criteria would the commission consider? Well amongst them would be;
- Consider the appropriate balance between investing in new infrastructure and making better use of existing infrastructure (including improving its condition and resilience)
- Consider the efficiency, affordability and value for money of the national infrastructure requirements to be set out in the assessment
- Have regard to the desirability of mitigating and adapting to climate change
- Consider where the existing delivery models and regulatory arrangements are fit for purpose and where these need to be strengthened.
All worthy ambitions, and all ambitions a large scale program to improve the energy efficiency of our creaking housing stock would deliver against. But our homes aren’t currently classed as infrastructure. Indeed, the Armitt Review’s draft National Infrastructure Bill provides a helpful answer to our opening question. In this Bill, ‘National Infrastructure’ means infrastructure of strategic significance in or relating to the following sectors –
- Energy generation, storage, distribution and supply
- Flood defences;
- Hazardous waste
- Waste storage, transfer supply and treatment
How can energy generation be of strategic significance yet the most cost effective route of cutting energy use not be? Over 40% of UK energy demand comes from buildings while the significant majority of that energy is used in our homes. To consider building power stations and power distribution networks, gas import infrastructure, gas storage systems and gas distribution networks to be of strategic importance yet not actually consider reducing core energy demand is a glaring omission that will cost us all.
The economic co-benefits of a large scale retrofit program stack up very well against other options such as road building. Cambridge Econometrics modeled the benefits of a large refurbishment program against other infrastructure projects with energy efficiency coming out on top. A similar analysis carried out on behalf of WWF suggests a 1.1% increase in GDP, 190,000 new jobs and an increase in real disposable income by £565 per household by 2030 if the fourth carbon budget were met, in part, through a large scale energy efficiency program.
The social and environmental benefits stack up too. Studies show lower hospitalisation rates and shorter stays in hospital for those living in warm homes and a negative impact on mental health, educational achievement and well-being for those that don’t. While our homes are increasingly becoming extensions of our energy infrastructure they are, and always have been, extensions to our hospitals and schools, our universities and care homes.
I’ve mentioned the opposition’s Armitt Review, but the issue straddles the political divide as all parties have a stake in ensuring both the country, and its citizens, achieve their economic potential. In the book Compassionate Economics, Conservative MP Jesse Norman suggests;
‘Compassionate Economics is generous in its view of people. It sees people not merely as economic agents, but as human beings; as fizzing bundles of capability and potential’
Evidence suggests children growing up in fuel poor homes struggle to realise their full potential. Yes, ideology can dictate how you make a worthy intervention – whether it’s full on regulation or smart ‘nudges’ – but making home energy efficiency a National Infrastructure priority guarantees the issue the attention it deserves.
And the approach needn’t stop at these shores. A ‘mission letter’ from The EU President-elect Jean Claude Juncker to his new Commissioner for Climate Action and Energy contained the following sentence;
“You will have to identify and select infrastructure projects on which to focus, assess the need to add to the current legal framework and monitor very closely the implementation of existing legislation.”
This brings us back to those carved stone heads on Easter Island. Clearly badged as an infrastructure priority of the day, the officials in charge failed to protect either the trees used to build fishing vessels or the bird populations that helped feed the island. As a result no descendants are around today to tell us quite why the carved heads were deemed an infrastructure priority to begin with. Although the fact that most look out to sea, blind to the infrastructure failures behind them, offers an easy analogy to make with current practice.