New Infrastructure Strategy confirmed

The budget confirmed a 10-year infrastructure strategy will be published in the spring of 2025. The National Infrastructure and Service Transformation Authority (NISTA) will oversee this, to be operational by 2025: 

Establishing the National Infrastructure and Service Transformation Authority (NISTA) to drive more effective delivery of infrastructure across the country. Alongside existing assurance mechanisms, NISTA will have an enhanced role in supporting major projects, including validating business cases prior to HM Treasury funding approval

CIHT welcome the commitment to a long-term strategy and an authority that will look at the integration of different infrastructure networks and the interdependencies between services, especially to ensure that they can still run smoothly when affected by extreme weather events. 

There is insufficient assessment of the impact points of integrated systems (water, roads, rail) affected by the same weather event. CIHT calls for NISTA to be a strategic, cross-modal team to explore and identify these “common impact points” where different networks are most likely to be affected by extreme weather and prioritise resilience planning to avoid multiple failures at such locations. While collaborative working is essential to this approach, it is suggested that a multi-agency overview is necessary to be most effective to minimise the wider effects when different infrastructure systems (roads, rails, water) share a common impact. 

CIHT also calls for the strategy to focus on improving and future proofing the current infrastructure against extreme weather events. 

CIHT offers its support to Government in understanding what the infrastructure strategy should look like and help shape the vision for the UK Infrastructure development over the next 10 years.  

The Government has committed to 1.5 million new homes and has introduced reforms to the National Planning Policy Framework (NPPF). As outlined in our response to these reforms, these homes must be delivered in the right places, ensuring quality, sustainable developments with adequate provision for local services and good connectivity.

CIHT welcomes the Government’s continued commitment to planning reform and emphasises the need for an approach to national infrastructure that ensures that communities are well connected and meet the needs of people, rather than cars. 

Certainty of funding and long-term commitments 

The Department for Transport’s (DfT) settlement provides total departmental expenditure limits (DEL) funding of £30 billion in 2025-26. This represents a £1.2 billion year-on-year cash increase in 2025-26. 

Five-year capital budgets will be announced in the upcoming spending review, to be extended every two years at future spending reviews to avoid funding ‘cliff edges’ and provide certainty. The Office for Budget Responsibility (OBR) has also modelled the Budget’s impact on growth over a ten-year period, rather than five. 

The fiscal rules are set out in a new Charter for Budget Responsibility. This includes a commitment to one major fiscal event per year, more regular spending reviews, and improved visibility of departmental spending. The National Audit Office and a new Office for Value for Money will offer ongoing assessments of projects and departmental spending. 

The Government is reforming how it plans, assures, delivers, and evaluates capital spending and will underpin these reforms with new and strengthened institutions. These changes will provide greater certainty and greater assurance that investment is high-quality and well delivered, including by:

• Publishing a 10-year infrastructure strategy alongside Phase 2 of the Spending Review, outlining the Government’s long-term approach.
• Setting five-year capital budgets and extending them every two years at regular spending reviews to avoid funding ‘cliff edges’ and give more certainty.’
• The Government will also use the new Procurement Act to create a simpler and more transparent regime for public sector procurement that will deliver better value for money and reduce costs for business and the public sector. The government will implement the Act in February 2025 with further reforms including a new National Procurement Policy Statement.

CIHT welcomes the support for long-term certainty and commitment - it is something we have long called for. We especially welcome the commitment on capital budgets and call for the Government to concentrate on improving the condition of existing assets and extending the life of existing assets. Certainty of funding will provide confidence for contractors and consultants during tenders and will contribute to stable pipelines of works for the upcoming years, creating more high skilled jobs.  

The Budget promises reforms to the procurement regime, including a new National Procurement Policy Statement (NPPS). The current NPPS states that all contracting authorities should have regard for tackling climate change in their procurement activities. CIHT would encourage reforms to the procurement regime that will strengthen measures to support delivering on this priority. For example, the adoption of agreed common standards for carbon management in procurement, as is recommended in CIHT’s report ‘Building carbon reduction into procurement processes’

Local roads maintenance and local transport  

The budget confirmed targeted transport investment to contribute towards the Government’s economic growth mission and productivity drive by increasing access to labour markets and unlocking areas for wider development, including housing.  

The Government pledged an investment of almost £1.6 billion to maintain roads across the country. This is an increase of £500 million on 2024-25 and represents a near 50% increase, on 2024-25, in funding for local roads maintenance.  

‘Plans set at Spring Budget 2024 were for public sector net investment (PSNI) to fall from 2.6% in 2023-24 to 1.7% of GDP in 2028-29. Under the government’s new spending plans, public sector net investment will now average 2.5% of GDP over the next five years supported by £100 billion additional capital investment. 

The settlement provides increased investment in local roads maintenance and local transport, supporting everyday journeys and addressing poor connectivity within our towns and cities across the country, which is currently a key drag on growth. It does this by: 

The settlement provides increased investment in local roads maintenance and local transport, supporting everyday journeys and addressing poor connectivity within our towns and cities across the country, which is currently a key drag on growth. It does this by: 

• Going beyond the government’s promise to fix an additional 1 million potholes per year and providing a £500 million cash increase on 2024-25 local roads maintenance baseline funding.  

• Providing an additional £200 million for City Region Sustainable Transport Settlements, bringing local transport spending for Metro Mayors in 2025-26 to £1.3 billion. The government will also work with Mayoral Combined Authorities to increase the ambition on housing investment that accompanies expansion of transport links.

• Providing over £650 million of funding for local transport beyond City Region Sustainable Transport Settlements in 2025-26 to ensure that transport connections improve in our towns, villages and rural areas as well as in our major cities. This includes funding to progress transport-related Levelling Up Fund projects from Rounds 1, 2 and 3. The Transport Secretary will set out further detail on how this funding will be allocated in due course.

• Providing over £1 billion funding to support local areas and bus operators, in 2025-26, providing high quality bus services across the country. The government is extending the bus fare cap, which was due to end in December 2024. A new cap will run from January 2025 to December 2025 at the higher rate of £3. This will allow the government to develop a more sustainable model of government support for the bus sector that is better value for taxpayers and bus passengers.

• £485 million for Transport for London (TFL)’s capital renewals programme in 2025-26. This includes funding for rolling stock on the Piccadilly and Elizabeth Lines.

• Providing an additional £100 million investment in cycling and walking infrastructure in 2025-26, to support Local Authorities to install cycling infrastructure and upgrade pavements and paths

CIHT welcomes the Government’s ongoing commitment to the maintenance of the local road network, and we are pleased that the Budget facilitates an increase in public investment. CIHT believe that to deliver this funding, the government should follow the recommendations in our ‘Improving Local Highways’ report and commits to deliver the -  

• Establish an improved system of monitoring that gives clarity on how the Local Highways Network is performing and includes comparisons of efficiency, effectiveness and innovation in delivery
• Commit to establish an inflation- linked local highways fund
• Create a better understanding of the asset through improved data
• Establish new sources of funding to support the local highways fund for the Local Highway Network (LHN) that will create a vision, funding and focus over the next ten years. 

CIHT are pleased that the Government is taking a broad approach, providing £650 million of funding for local transport in towns, villages and rural areas. Ensuring that everyone has access to effective transport networks is key to addressing regional inequalities and supporting economic growth. It is vital that efforts to increase local level autonomy are accompanied by adequate funding provision, so this represents a positive step.  

CIHT welcomes investment in active travel infrastructure, and hope that funding is used effectively to deliver holistic active travel networks to maximise the social and economic benefits of walking, wheeling and cycling and promote interconnectivity with other forms of sustainable transport.  

CIHT values continuing professional development and it is essential that those designing and changing the public realm are aware of issues faced to avoid wasting public money on schemes that need to be altered later as they have excluded part of the community. We have previously recommended that anyone who purchases items for use in the public realm or designs schemes should undertake disability equality awareness training. 

CIHT therefore encourage the government to allocate some of the funding for active travel to fund disability equality awareness training for all local authority personnel who are designing and changing the public realm, and incentivise disability training by making some of the funding for transport schemes only available to local authorities that have trained staff. As stated in CIHT’s report “Creating a public realm for all”, accessibility training should also be provided for housing and retail developers. 

The transition to electric vehicles (EVs) is crucial to decarbonising transport and will support growth and productivity across the UK. There are now more than 1 million electric cars on our roads. The government has committed to phasing out new cars that rely solely on internal combustion engines by 2030 and that from 2035 all new cars and vans sold in the UK will be zero emission. The government is building on this by:

• Investing over £200 million in 2025-26 to accelerate EV charge point rollout, including funding to support local authorities to install on-street charge points across England. This will build on the UK’s existing charging network, which continues to grow at pace with over 70,000 public charge points.

• Providing £120 million in 2025-26 to support the purchase of new electric vans via the plug-in vehicle grant and to support the manufacture of wheelchair accessible EVs.

• Maintaining tax incentives to purchase electric cars through Vehicle Excise Duty First Year Rates and the Company Car Tax regimes, as well as by extending 100% First Year Allowances for electric cars and charge points for a further year.

The Government also confirmed that the fuel duty freeze will be extended by 12 months.  

The government will freeze fuel duty rates for 2025 26, a tax cut worth £3 billion over 2025-26 which represents a £59 saving for the average car driver. The temporary 5p cut in fuel duty rates will be extended by 12 months and will expire on 22 March 2026. The planned inflation increase for 2025 26 will also not take place.

The Budget details £3.9 billion in 2025-26 for the first carbon capture, utilisation and storage (CCUS) clusters in the UK. The Government also pledges investment in the natural environment and climate mitigation and adaptation.  

Leveraging £8 billion of private investment in Carbon Capture, Usage and Storage infrastructure, continuing funding for the development of Sizewell C, and providing funding to kickstart Great British Energy.

The government will also invest in the natural environment and in climate mitigation and adaptation to protect the economy from the impacts of climate change. The Budget confirms £5 billion over two years to support the transition towards a more productive and environmentally sustainable agricultural sector in England and over £400 million of support for tree planting and peatland restoration. The government will invest £2.4 billion over two years in flood resilience to support the building of new flood defences alongside the maintenance of existing assets to protect communities.

While tax incentives on EVs purchases are positive, they may pose a challenge to the rollout of an equitable decarbonisation process as they benefit only those who can afford the initial cost of EVs. As outlined in our recently published policy brief, Ensuring a Just Transition to Net Zero Transport, decarbonisation policies and interventions do not land on society on a level playing field, they interact with a complex network of existing inequalities.

CIHT calls for government to consider the possible barriers to the adoption of electric vehicles and plan how to support those who will be priced out or negatively impacted.  

Although CIHT recognises pressures on household budgets, the freezing of fuel duty appears to be a failed opportunity to incentivise the use of low carbon modes. Increasing the bus fare cap and raising rail fares whilst freezing fuel duty does not help tip the marginal cost balance in favour of sustainable transport choices. 

CIHT welcomes the awareness of extreme weather events. As per our recently published report, Delivering a Resilient Transport Network, the highways and transportation sector requires serious prioritisation in this period of climate emergency. 

As ageing assets are increasingly exhausted in service of the economy, asset failures will only increase, unless there is a major realisation that the greater intensity and frequency of adverse weather events will see many vulnerable parts of our transport system reach their ‘tipping points’.

Progressing key strategic road schemes, such as dualling sections of the A47, where work has begun to improve connectivity between East Anglia and the North, and on the A57, where work will start in the coming weeks to improve journey times between Sheffield and Greater Manchester. Roads investment in 2025-26 will be funded through an interim roads settlement, and the third Road Investment Strategy will be set out in the next phase of the Spending Review. The government will also move toward feasibility work on improvements to the A75 by providing up to £5 million in 2025-26.

CIHT welcomes investment in the country’s strategic road network, though the delay to RIS3 challenges the commitment to certainty and stability provided by the 5-year funding cycle. We recognise that this will impact contractors and the wider supply chain, especially those already involved in delivering RIS2 and adds to already existing delays, start/ stop funding and uncertainty.

This has wider implications for skills and industry retention. We call for the interim settlement to focus on already started projects and prioritise maintenance and future proofing over new developments.

CIHT is also looking forward to how this interim settlement will incorporate the lessons learned from RIS1 and RIS2, especially around deliverability and contingency plans. 

• The TransPennine Route Upgrade between York and Manchester, via Leeds and Huddersfield, will transform northern rail connectivity and lay the ground for Northern Powerhouse Rail.

• East West Rail will connect Oxford, Milton Keynes, and Cambridge and unlock land for housing and laboratories, supporting the wider Cambridge life sciences cluster. The first East West Rail services will begin operations next year, running between Oxford, Bletchley, and Milton Keynes. The acceleration of the Marston Vale Line will ensure these services extend to Bedford from 2030. To deliver the next stages of East West Rail the government is launching a consultation in November 2024.

• Progressing HS2 Phase One to improve connectivity between London and Birmingham, and increase capacity on the West Coast Mainline, while delivering the Secretary of State for Transport’s commitments to control costs and bring the project back on track.

• HS2 trains will run to Euston, with funding provided for tunnelling to the central London terminus, catalysing private investment into the station and local area. Investment at Euston will be further supported through the appointment of Bek Seeley to chair the Euston Housing Delivery Group, to drive forward an ambitious housing and regeneration initiative for the local.

The Government also pledged to improve the performance and reliability of rail services, ensuring that the rail sector can operate effectively and become financially sustainable.

The Secretary of State for Transport’s plans for reform, will look at changes to fares, services and workforce practices to deliver a modern railway that meets how people now want to travel. These will increase efficiency and reduce costs, while boosting ridership and revenue and improving performance, laying the groundwork for the transition to Great British Railways.

The government confirms that the annual regulated rail fares cap will rise by 4.6% on 2 March 2025, one percentage point above RPI. This will be the lowest absolute increase in three years. Subject to an industry proposal, the government will also agree a £5 increase to the price of most rail cards (except the disabled person’s rail card). On average rail card holders save up to £158 per year.’

CIHT welcomes efforts to improve connectivity across the country through rail. It is unfortunate that the price of rail fares and rail cards will increase, which may exclude potential rail passengers on low incomes.  

Increasing core spending power by around 3.2% in real terms in 2025‑26, with £1.3 billion of new grant funding including at least £600 million new grant funding for social care. 

The devolved governments will receive an additional £6.6 billion through the operation of the Barnett formula in 2025‑26. This includes £3.4 billion for the Scottish Government, £1.7 billion for the Welsh Government and £1.5 billion for the Northern Ireland Executive. This will enable substantial investment into schools, housing, health and social care, and transport across Scotland, Wales and Northern Ireland. 

The government has established the Council of Nations and Regions and Council of the Mayors; is working with local areas in England on the upcoming English Devolution White Paper and as they develop Local Growth Plans; and is putting ‘place’ at the heart of Invest 2035: A Modern Industrial Strategy

CIHT welcome the government’s commitment to working with local leaders and devolved governments, particularly given the current funding constraints and need for the provision of local services. It is vital that the empowerment of national and local authorities across the UK is accompanied by adequate funding. 

The government is committed to addressing skills challenges, which are holding back growth across the country, alongside supporting people into work. The government has already established Skills England to begin addressing these challenges 

Providing an additional £300 million for FE to ensure young people are developing the skills they need to succeed and taking steps to transform the Apprenticeship Levy into a Growth and Skills Levy through £40 million investment. This will help to deliver on the commitment to launch shorter and foundation apprenticeships in key sectors. 

The government will provide £46 million of additional funding to support recruitment and training of 300 graduates and apprentices into local planning authorities, accelerate large sites that are stuck in the system, and boost and upskill local planning authority capacity to deliver the government’s wider reform agenda.

CIHT welcomes measures that supports technical skills being supported in the sector. Focusing on technical skills is key to the highways and transport sector being able to build, operate and maintain our vital transport infrastructure. 

The government’s plans to build 1.5 million new homes will require support to local planning authorities to meet targets and we appreciate measures have been included to boost and upskill local planning authority capacity.

It is important that the government supports the development of technical skills and expertise at a local level, in order to deliver on the principles of integrated land use and transport planning.