The Government’s National Infrastructure Plan (NIP) could be a boon for smaller regional firms, though concerns remain among lawyers whether the plan will follow reality.
The NIP was published as part of the Government’s Autumn Statement and sets out the “broad vision of the infrastructure investment required to underpin the UK’s growth”.
On 29 November, Chancellor of the Exchequer George Osborne revealed the Government’s £30bn plan, which includes attracting £20bn of private investment through a memorandum of understanding with two groups of pension funds and the Chinese sovereign wealth fund, an additional £5bn of infrastructure spending in this spending review, and committing to £5bn of capital projects in the next spending review period.
The Government has also approved 35 new rail and road schemes to get started right away as well as identifying more than 500 projects that it wants to start in the next 10 years.
“As ever, there’s good news and bad news,” said Allen & Overy’s global co-head of infrastructure David Lee, reacting to the news. “The good news comes from the very existence of a National Infrastructure Plan, something that would have been unthinkable 10 years ago.
“The bad news is the extent to which the plan fails to offer solutions to the problems it has identified: how to attract the capital needed in a competitive global market place; what model to adopt and how to toll new roads.”
Hamish Lal, head of Jones Day’s London contentious and non-contentious construction law practice, said about the NIP’s likely effect on law firms: “It really only impacts the construction, projects and planning teams and is likely, in the medium term, to lead to increased work for regional firms… A lot of the projects are pretty small in real terms.
“One does, though, need to remain mindful that a lot of the traditional public sector work is now re-addressed in the NIP. The focus is on private sector finance and lawyers will, in parallel with their clients, need to be very innovative when it comes to contractual structures, security documents and also fees. The standard form work streams will be limited which is, ultimately, super news for the brighter practices.”
Eversheds’ senior legal manager Michael Conroy Harris agrees that an increased focus on private sector funding could make projects more complex.
“Even if the schemes are sometimes smaller, they’ll still require input from the private sector so they’re not going to be any less complex,” said Conroy Harris. “The kinds of firms likely to pick up on these deals are those that come at them with a slightly different angle in terms of working with the private and public sector.”
That said, Conroy Harris added that the turbulence in Europe’s economy will make any plans difficult to follow.
“The only certainty is that things are going to keep changing,” he said. “Who knows what we’ll see if there’s another infrastructure plan in a year’s time. How similar or different will it be?”