A ‘renaissance’ in UK infrastructure investment expected to be announced alongside the Budget in March has attracted a lot of comment, but few in the perennial political football that is the construction industry will yet have much confidence that anything transformational is likely to be a widespread agreement that private funding in some form will be needed in a post austerity world, with the current Chancellor of the Exchequer Sajid Javid promising an ‘infrastructure revolution’ as an extra £13 billion or so is pumped into public services. But the signs for private finance in any form are not good. There have been new dawns for infrastructure investment aplenty promised over the years, some of which have delivered vital infrastructure that modern economies need, but all of which have fizzled out again before properly delivering on the promises.
The past ten years or so of austerity has left much of the UK’s infrastructure in a sorry state, especially those parts of it that depend on local authority funding. Councils have had budgets slashed with much of what is left diverted to vital ‘front line’ services like social care and away from infrastructure basics like filling in potholes. The north of England seems to have a solid case to back claims that it has been neglected, especially in transport investment.
All that is over, we are being promised. Will it be any different this time? That is the question that is always asked, and so far the answer has always turned out to be no. As well as lacking the political will to maintain sensible levels of infrastructure investment, the UK seems to have problems with procuring large projects or large scale programmes of work. Regular readers of Construction Law will be familiar with this theme.
Further evidence of a lack of skills in this area comes from January’s HS2 report from the National Audit Office (see News) raising fears that much of a possible major boost to infrastructure investment could be misallocated to a political vanity project.
The original budget estimate seems to have been plucked from a hat; how else to explain a more recent estimate of over £100 Billion? What confidence can the government have that the latest cost estimate is any more reliable than what has gone before?
HS2 is dividing opinion sharply. The construction industry is desperate for the work. But the House of Lords has called for work to be ‘paused’ and two years ago, even before Parliament gave the go ahead to HS2 in February 2017, a leaked report prepared for the government’s own Infrastructure Projects Authority warned that the then budget of £56 Billion could overshoot by 60%. The project management capabilities of HS2 were not up to the job that report alleged, an accusation that has resurfaced repeatedly.
Releasing the NAO report, its head Gareth Davies said: “There are important lessons to be learned from HS2, not only for the Department for Transport and HS2 Ltd, but for other major infrastructure programmes.” The Department for Transport and HS2 Ltd must be transparent and provide realistic assessments of costs and completion dates as the programme develops, recognising the many risks to the successful delivery of the railway, he added.
The problem bedevilling major infrastructure projects though has been precisely an inability to provide accurate costs and delivery dates. It is not unique to HS2. The NAO analysis might be highly accurate, but it is short on suggestions on how exactly to achieve what it urges. Let’s hope HS2 doesn’t end up being just another expensive lesson in how not to do it that the UK doesn’t learn from.
Nick Barrett
Editor