New approaches to infrastructure investment will be essential if Northern Ireland is to leave a positive economic and climate legacy for future generations, writes Kaine Lynch
Infrastructure is a fundamental building block of society. It brings us together, protects the environment and supports economic growth.
The benefits of enhanced infrastructure are more important today than ever before, given the need to boost the economy in Northern Ireland (NI) and meet legislative obligations concerning climate change.
NI’s neighbours are making significant headway in relation to infrastructure.
Earlier this month, the National Infrastructure Commission (NIC) in London published its second National Infrastructure Assessment (NIA) while the Irish Government unveiled plans for an Infrastructure, Climate and Nature Fund.
In contrast, NI’s Department of Finance (DoF) recently commenced a consultation on potential revenue-raising measures necessitated by extreme pressures on public finances.
NI’s lack of wastewater infrastructure constrains development, demand for social housing is outstripping supply, public transport usage lags behind the rest of the UK and the road network is deteriorating rapidly.
These issues won’t resolve themselves. If we don’t act, NI’s infrastructure will continue to deteriorate, and our children will inherit an even larger infrastructure deficit.
However, there are several actions NI can take to address this.
Long-term strategy
Critical to the success of any endeavour is a plan. While there are several infrastructure-related strategies, NI does not have a cross-sectoral one akin to the UK’s National Infrastructure Strategy or the National Development Plan in Ireland.
Like the approach adopted by the NIC, the development of a plan must begin with a clear understanding of NI’s current baseline and relevant sectoral priorities. This evidence-based approach will allow the region to push beyond time horizons associated with political cycles and focus on the legacy we leave for the next generation.
Prioritisation framework
Given NI’s infrastructure deficit, it is inevitable that the development of an infrastructure plan will identify a longlist of challenges and an unaffordable list of potential interventions.
Challenges must be systemically triaged to arrive at a realistic shortlist. The process should consider the maintenance, renewal and resilience of NI’s aging assets and constructing new ones.
The process of triaging will require a single set of carefully developed criteria that identify relative priorities across the programme. It will also be necessary to apply the criteria strictly and consistently. Without this uniform approach, it will be impossible to robustly make difficult decisions to invest in one thing over another.
The analysis will, of course, also identify lower priorities. Existing projects aimed at addressing these should be carefully considered.
Continuing to develop lower priority projects will result in fewer remaining resources to focus on addressing those of higher importance.
Commercial models
In addition to prioritisation, there is a need to critically examine how NI’s financial envelope for infrastructure can be expanded.
The recently published NIA identifies that private sector investment will account for around 50 percent of total infrastructure investment over the next two decades. However, NI remains heavily reliant on public sector funding.
Opportunities exist to chart a new course and better leverage private sector investment, whether it be to develop NI’s electric vehicle charging network or increase housing stock.
The potential introduction of revenue-raising measures as outlined by the DoF would pave the way for reduced reliance on the public purse and unlock potential lending opportunities to support ‘invest to save’ initiatives.
The UK Infrastructure Bank, established in 2021, presents an opportunity for the Executive and councils to temporarily expand their financial envelope. The Executive can also access Reinvestment and Reform Initiative borrowing at even more competitive rates.
Delivery structures
NI has immensely talented infrastructure professionals. Individuals are limited, however, and expertise is dispersed across the public sector. These factors make it difficult to deploy the right skills to the right place at the right time, reducing the likelihood of project success.
The UK Government Commercial Function and the Infrastructure and Projects Authority are models in which skills and resources are held centrally but deployed to departments to support delivery.
Implementing a similar approach in NI would allow the pooling of limited skilled resources, develop deep infrastructure delivery expertise and deploy resources to where they are needed most while ensuring funding departments retain overall accountability and control.
Kaine Lynch is Director of Government and Infrastructure Advisory at EY. You can read more here.
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