The UK Infrastructure Bank Act 2023 (“the Act”) was passed by Parliament on 23 March and comes into force on 24 May 2023. It puts this Treasury arms-length body on a formal statutory footing.
Although UKIB has been operating since June 2021, the Act provides much greater certainty around the UKIB’s objectives, activities, responsibilities and governance. It is also gives added weight to the UKIB enduring as a long-lasting institution.
Section 2 clearly sets out UKIB’s objectives are to help tackle climate change and to support regional and local economic growth. Its activities are to provide financial support for infrastructure projects, provide loans to public authorities and act as an expert advisory service (section 3).
The impetus behind the Act is to enshrine UKIB’s operational independence. It also does much to address recommendations made by the House of Commons’ Public Accounts Committee in its report earlier this year. For example, in relation to reporting requirements:
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the Treasury must lay a statement on UKIB’s strategic priorities before Parliament, having consulted the devolved administrations where appropriate (section 3),
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UKIB’s annual reports and accounts must be laid in Parliament (section 6), and
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the Treasury must also appoint an independent person to review UKIB’s performance, at least every 7 years (section 9).
Although the Treasury has powers to issue Directions to UKIB (section 4), the policy intention is that these should be used sparingly. In any event, intervention by the Treasury into UKIB’s decision-making would ultimately be subject to public law considerations when it comes to interference in UKIB’s operational independence. Finally, the aim of providing certainty and stability to UKIB’s existence is also borne out by the fact that Parliament would have to approve secondary legislation if UKIB’s activities, or the types of infrastructure in which it can invest, is to be amended in future.
Once the Act is in force in two months’ time, and it is fully up and running as a statutory body, we expect to see an associated increase in the volume and scale of UKIB’s activities.
Authored by Owen Robinson.
