The UK will fail to reach net zero greenhouse gas emissions by 2050 if regulators aren’t given new powers to ensure utility companies invest in sustainable infrastructure, according to a report from the National Infrastructure Commission.

NIC chair Sir John Armitt said the UK’s regulatory system must adapt to meet the demands of the future and urged ministers to take action to strengthen it.

Former chancellor Philip Hammond initially tasked the NIC in 2018 with investigating the regulation of the UK’s energy, telecoms and water industries, and the commission’s subsequent report makes the following recommendations:

• Ofcom, Ofgem and Ofwat should have new duties to promote the achievement of net zero by 2050 and improve resilience;
• The government should set out a long-term strategic vision for each of the regulated sectors, through strategic policy statements, within the first year of each Parliament, to support lasting plans and stable funding;
• The UK Regulators Network should be given a stronger leadership role through the appointment of an independent chair to promote collaboration and coordination, and ensure markets continue to deliver for consumers;
• Most major strategic investments should be opened to competition to support innovation, rather than relying on incumbents or government to have the best ideas;
• Regulators should be able to prevent companies from engaging in price discrimination that does not provide an overall benefit to consumers.

The report also considers the need for extensive strategic investment in each of the sectors, to reduce emissions, improve digital connectivity and build resilience as floods and drought become more likely – and the role of regulation in delivering it.

Sir John Armitt, NIC chair, said: “The government has committed the UK to net zero by 2050, but if regulators aren’t equipped with a new duty to specifically reach this target, then it is simply unattainable. The regulatory system must adapt to meet the demands of the future – and the great challenge we face to bring down emissions and build resilience against increasingly frequent extreme weather. If ministers are serious about a low-carbon revolution, they must act quickly and decisively to modernise regulation.”

National Infrastructure commissioner Julia Prescot said: “Our utilities require transformation across the board in coming decades – to bring down emissions, safeguard our water supply and improve digital connectivity up and down the country. That’s going to require unprecedented levels of investment. Well-balanced regulation would give infrastructure providers long-term certainty, empowering them to invest in innovative and creative solutions.”

Click here to download the full NIC Strategic Investment and Public Confidence report.