Ein cyf/Our ref: NICW/24/DC/RR/GB

Eich cyf / Your ref:

The Rt Hon Rachel Reeves MP

Chancellor of the Exchequer

24 September 2024

Dear Rachel,

The National Infrastructure Commission for Wales exists to provide recommendations to the Welsh Government on the future needs for infrastructure in Wales. Our remit covers all infrastructure sectors, and a timescale of from 5 to 80 years into the future.

We are concerned that the policy ambition of a more sustainable Wales, exemplified by the Future Generations Act, is being restricted by the Green Book in its current form.

To take one example, the Value of Travel Time Savings (VTTS) methodology explicitly ‘rewards’ schemes that reduce nominal time for journeys by car. However, this saving is only ‘real’ to the current inhabitants of Wales, and takes no account of the needs of Future Generations.

In other words, schemes that provide true commitment to the Brundtland definition of sustainability - not compromising the needs of future generations - are discriminated against in terms of attracting UK Government funding due to the nature of the framework used to evaluate them.

Another issue is the current - seeming- lack of flexibility for funding to be adjusted between capital and revenue expenditure. This rule applies to settlements with the devolved administrations, which produces a friction between local legislation and policy priority, and the Green Book approach.

The risk of maintaining a focus on capital over revenue is that the new is prioritised over maintenance of the existing. The circular economy approach suggests that the ‘R-strategies’ should be implemented to reduce costs and carbon emissions.

Each of these ‘R-strategies’ require revenue support more than capital expenditure. In order to see Wales obtain the infrastructure that enables the well-being of our citizens, we would like to see a rebalancing towards revenue spend allowing a prioritisation of good quality and well-maintained existing infrastructure, over new provision.

We would be very happy to meet with you or your colleagues to discuss the impact the current arrangements have on policy and projects in Wales.

Yours sincerely,

Dr David Clubb Cadeirydd/Chair

Dr Jenifer Baxter Dirprwy Gadeirydd/Deputy Chair