National Infrastructure Commission chair Sir John Armitt writes for Utility Week about how the committee’s new recommendations on securing resilience would affect the sector.
The efforts of everyone currently ensuring the safe supply of utilities during the ongoing Covid-19 pandemic should be applauded.
It is in part due to prior planning and investment in business continuity strategies, which have often been developed and refined over many years.
But as the commission’s latest report finds – and as Utility Week readers will be all too aware – there is no room for complacency when it comes to securing resilience in our essential national services.
There will always be potential new problems on the horizon, which may be more acute or unfamiliar – and we know that these risks will be exacerbated by climate and other changes.
To safeguard the systems our businesses and communities rely on, we need to anticipate and prepare for these challenges.
Our report acknowledges that resilience can be hard to get right. Our infrastructure systems are complex, and infrastructure in one sector may have dependencies on, or interdependencies with, other sectors that can exacerbate failures.
Also, we know that infrastructure operators, such as utilities providers, do not always have the right incentives for resilience. There can also be a temptation to avoid facing resilience challenges, which may be due to optimism, denial, or a lack of scrutiny of plans and assumptions.
At present, planning in some sectors can be narrowly focused on specific hazards, neglecting wider factors – such as impacts on society and the environment. For example, plans in the water sector tend to focus on drought, but network failures and dependencies on other sectors receive less focus.
The framework we have developed seeks to address these issues. It sets out an approach for facing uncomfortable truths, valuing resilience properly, testing for vulnerabilities and driving adaptation.
Much of this will be familiar to those who have worked in business continuity or longer-term resilience planning. But we hope by codifying a framework, we will create both a shared vocabulary for discussing resilience challenges across sectors and provide a model approach for developing long term strategies to address them.
Strategies should consider a wide range of changes and uncertainty, and should be scrutinised by regulators and experts so that assumptions are challenged and best value options are selected.
Building on the commission’s previous recommendation that government should update regulators’ duties to include promoting resilience of infrastructure systems, we have made three headline recommendations to government and the sector.
The first is that – following advice from regulators – relevant departments should publish clear standards every five years for the resilience of energy, water, digital, road and rail services.
Transparent standards will help operators understand what level of resilience they are expected to deliver as they anticipate potential events. The standards need teeth and should be underpinned by regulatory obligations on infrastructure operators to meet them.
Alongside this, we propose that regulators oversee a new scheme of stress tests, similar to those used in the financial sectors.
While some operators already run such processes, a more systematic approach across sectors, supported by proportionate governance, will help embed the resilience standards.
Lastly, we are calling for a joined approach to long-term infrastructure planning, with operators obliged to develop and maintain resilience strategies, and regulators ensuring their determinations in future price reviews are consistent with meeting resilience standards in the short and long term.
The commission is upfront about the fact that our recommendations will cost money to implement. But we are equally clear that, over time, investing in the long-term resilience of vital systems will prove a net gain: infrastructure failures have costs too, both to consumers of those services and to society more widely.
We have asked government to provide “realistic, proportionate” standards for resilience which acknowledge the costs and benefits of delivering them, and why we foresee a role for regulators (supported by additional resources if necessary) in ensuring future resilience investments represent value for money.
At a time when the resilience of utilities and other essential infrastructure has proved to be a quiet hero in the nation’s ability to survive life in lockdown, we have a duty to safeguard that reliability for the future.
It will take concerted will and resources, but in face of an uncertain future, it is a responsibility we must all own together.