Will infrastructure be the election winner?

There is no doubt that all the mainstream political parties in the UK are talking up the benefits of infrastructure. It appears that whoever wins the general election, new infrastructure will be built because its development is seen as a way of helping to boost the economy and rebalance between north and south. There do, though, remain significant challenges ahead.

There continues to be confusion and disagreement about what the term 'infrastructure' means, especially to the public. Speaking at a conference, Katharine Peacock, managing director of ComRes, revealed that their polling showed building more homes is the top infrastructure priority while improving roads came a distant second. But when it comes to election priorities, the electorate ranks housing just seventh overall.

There is also a lack of political consensus about what the priorities should be, she explained. In particular, Labour Members of Parliament (MPs) favour rail over road, which contradicts the views of the general public. There is also widespread support for renationalisation of the railways among Labour candidates, which may help to explain the recent comments of Michael Dugher, Shadow Secretary of State for Transport, about an increased role for the state in running them. Future Conservative MPs do not express much support for wind farms and waste facilities.

POLITICS IS ALIVE AND WELL

Impressive plans for housing and infrastructure in London were announced by the Mayor of London, Boris Johnson, and Chancellor of the Exchequer, George Osborne, early in the general election campaign. There is also a very clear government commitment to the “Northern Powerhouse” (boosting the UK's northern regions). On many of these announcements, the detail, especially regarding funding, is still to be worked out.

But in London, it is clear that the Mayor has been pushing hard for more infrastructure and Transport for London's impressive delivery of projects, as well as in running the network, has undoubtedly helped him to make the case. The London Infrastructure Plan 2050 was billed by Johnson as “a real wake-up call to the stark needs that face London over the next half century”.

Similarly, the development of the “Northern Powerhouse” has been championed by a number of political leaders from across the north of England, not least Sir Richard Leese and Sir Howard Bernstein, leader and chief executive of Manchester City Council respectively.
It provides a clear demonstration that political support for infrastructure is critical.

DEPARTMENT FOR INFRASTRUCTURE?

Despite the inception of Infrastructure UK and a National Infrastructure Plan, many have complained that the pace of development has been too slow. This has led to several suggested plans which could come to fruition post-election.

The Association for Consultancy and Engineering (ACE) has recently issued a report with Stephen Hammond MP, calling for a Department for Infrastructure, citing the benefits across leadership, better alignment and effective project management. This echoed the calls ACE made in a similar report in 2010 but appears to be gaining more traction this time around.

Civil servants are said to be giving active consideration to such a department being established after the election. John Manzoni, chief executive of the Civil Service, brought in to use his private sector experience to manage such a large organisation and change its culture, wants to shift the way that the Civil Service works. A new department could, it is claimed, help get rid of up to seven existing departments.

But government will not be doing less. It could be a case of the same roles simply being put into a single department. Such 'super departments' do not have a spectacular track record of success. Just look at the Department of the Environment, Transport and the Regions as a case in point. It was eventually broken up into smaller constituent parts. The new proposals could though lead to a headcount reduction, which will be needed if more budget cuts come the Civil Service's way.

ARMITT REVIEW

Sir John Armitt's review of infrastructure was announced in October 2012 by Shadow Chancellor Ed Balls. In particular, Armitt considered whether a new institutional structure should be established that better enables the long-term decision making necessary for strategic infrastructure planning; and how political consensus can be forged around these decisions. His report and subsequent draft bill suggest “a new independent National Infrastructure.

Commission to look 25-30 years ahead at the evidence for the UK's future needs across all significant national infrastructure and set clear priorities”. The assessment would be carried out every 10 years after widespread engagement and would be agreed by Parliament. Relevant government departments would then work up detailed sector plans for implementation which too would be considered by Parliament.

The Labour team have promised to implement Armitt's recommendations if they enter government and having a draft bill already in place means they could move quickly.

It could be argued that Armitt's proposals would sit well with a new Department for Infrastructure and could make the proposed sector plans more manageable and more integrated than may otherwise be the case. Such a setting may also help to overcome perceptions of Armitt's report being exclusively a creature of the Labour Party.

CHALLENGES

Aviation has still to be dealt with. Publication of the conclusions of the Davies Commission may have been pushed back until after the election but that does not mean it won't be an election issue, particularly in those constituencies most affected by potential expansion. A final report expected in summer 2015 will not guarantee any quick decisions, although Labour has promised to make one.

None of the political parties have agreed to abide by the outcome of the Commission. Indeed, in the case of the Liberal Democrats, a vote at their party conference in September 2014 saw them rule out new runways. So if the Lib Dems end up in coalition again, the question needs to be posed whether there will be a move away from the policy or whether a coalition involving them would have to stick to the commitment.

Politics is an ongoing process. This year's general election will be followed by a London Mayoral campaign in 2016 and for other directly elected mayors, for instance in Liverpool and Bristol.  Devolution plans could see the introduction of mayors in other cities as well.

All the while there is an apparent consensus around the benefits of infrastructure and a commitment to preventing the country from losing ground internationally and helping the UK win in the global race, then project risk is lowered.

Some projects will remain 'nice to haves', others personal dreams but out of the appraisal process come the projects that work for the country, cities and areas. Finance, as always, remains critical and the emerging science behind behavioural change means that we may not always need to build our way out of a problem. In other words, we should not simply continue to build infrastructure, but a lot can be achieved from using the existing systems in a smarter way.

Governments also need to ensure rural areas receive infrastructure investment such as broadband.  Current project assessment techniques may not always capture the full range of benefits and that is where politics needs to step in. Even if there is agreement at a national level on projects, opposition may still come locally as well.

Infrastructure delivery will remain a challenge but one that governments and mayors cannot duck.