How can the Government reduce the costs of managing infrastructure even further?

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The last Government made significant progress in improving the planning, performance and delivery of infrastructure in the UK with the 2014 National Infrastructure Plan identifying additional actions that will be taken to 2020 to further build on this progress.

While unblocking the pipeline to get projects flowing faster is a welcome step, little action has been taken to focus on feeding that pipeline in a sustained way.
Without sustained work across infrastructure categories, we end up with the perverse situation of rail electrification projects being 'paused' due to the supply chain being hollowed out over a number of years.

As a result, cost increases occur when projects are given the go ahead. Denting long-term productivity and leading to either higher consumer bills or a higher public finance outlay.

The infrastructure continuum

Infrastructure development is never a case of 'job done' with existing infrastructure assets such as roads, airports or digital networks, needing to be continuously repaired, renewed or upgraded. Occasionally, new infrastructure is needed to meet emerging challenges or to support economic activity.

How do we decide what action needs to be taken, and when, at each stage of that infrastructure continuum?

As John Armitt recently put it, in the UK we "classically rely on crisis" in deciding what infrastructure challenges we need to address.
Doing away with this tendency would lead to the UK developing world class infrastructure to support long-term competitiveness, boost productivity and support sustainable growth.

In addition, tackling infrastructure challenges at their most optimal time would lead to a reduction in overall costs.

Revisiting the UK Infrastructure Authority – one year on

This was the thrust of a paper we published in August 2014. Our view was that ultimately this was about trust, the public don't trust proponents of infrastructure projects because they don't understand what challenge those projects are seeking to overcome.

They are brought into the process too late in the day, usually when the 'crisis' is at peak point, and don't appreciate being told it's too late to have a detailed debate.

Ultimately this results in the vast majority of the public being unclear about why a project is needed and what the trade-off of not taking action would be. While a vocal minority are absolutely clear about why a project shouldn't take place.

Addressing that information asymmetry is key.

Evolving the National Infrastructure Plan

One way that asymmetry can be addressed is through the National Infrastructure Plan. The Government (or Infrastructure UK) should construct and publish a look ahead across the next three Parliaments of the infrastructure challenges we will need to address across that period and the cost of not tackling these challenges.

This isn't about delivery, nor is it about publishing project solutions but simply setting out what the current state of infrastructure assets are along the infrastructure continuum and what the trade-offs will be if we decide not to do something to move them along.

It would serve a key purpose, by providing:

  • Confidence that the right challenges are being identified
  • An opportunity to involve the wider public, starting debates on missing challenges and the trade off in doing nothing
  • Start a public debate on potential solutions and minimise opposition to eventual project proposals
  • Start the political debate on solutions far earlier than at present, giving this more time to take place and a clearer mandate to be given by the public

In making this change the Government will be ensuring that the infrastructure pipeline does have a structured way for projects to be fed in. A change which would avoid cost overruns, economic and productivity damage and environmental costs.

Author

Head of Business Environment Policy

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