New report identifies potential for infrastructure to support UK’s upgrade, net zero and energy security programs
- The UK Government has identified the importance of infrastructure to leveling out, tackling the longer term cost of living crisis through the provision of new household energy generation capacity and reaching Net Zero by 2050 .
- New modeling and research published today by the Northern Policy Foundation (NPF) shows that unless the UK drastically improves infrastructure provision, taxpayers will face an annual bill of £45billion sterling each year for the next five years.
- Additionally, modeling of one of our recommendations – adding an ‘upgrade component’ to high-value tender assessments – suggests this could result in a £550m increase. for the North and Midlands and could support or create between 19,000 jobs.
- Today, more than 80% of major infrastructure projects worldwide are delivered late and over budget.
- On average, major infrastructure projects will also continue to be delivered 3.5 years late, delaying the realization of their benefits for local people and the country.
- Initiatives such as Project Speed, the Construction Playbook, Civil Service Reform, and various “acceleration units” are all potentially steps in the right direction, but have yet to yield meaningful results and potentially lost ground. their momentum.
Boris Johnson, in particular, is rightly a fan of investing in large infrastructure projects which have proven – on average – to deliver a return on investment of 2.2 times the initial outlay. It has been placed at the heart of government programs for leveling up, net zero emissions and “energy security”.
Upgrade – on a range of measures including productivity, skill levels, health and wellbeing, job opportunities and connectivity – the North and Midlands continue to underperform not just London but also the UK averages. The productivity gap is so large that OECD and Eurostat analysis shows the UK to be one of the most geographically unbalanced economies in the developed world. In Europe, only Poland and Romania are more unequal than the United Kingdom
Between 2007-08 and 2018-19 capital expenditure on transport in London was around £6,600 per capita, compared to £1,880 in the East Midlands, £1,980 in the South West and three times the expenditure for Yorkshire and the Humber and the North. East (£2,200 per person).
Net Zero – the prime minister’s ‘ten-point plan’ specifically cites the need to: ‘transform our energy system…and grid infrastructure’, provide ‘modern and integrated port infrastructure’, ‘produce low-carbon hydrogen scale”, “accelerate the deployment of EV charging infrastructure” and the development of “carbon capture and storage infrastructure”.
Energy security – the war in Ukraine has particularly focused people’s minds on how and where our energy comes from. In particular, the government is committed to building new nuclear reactors – both traditional and small modular reactors – to help improve our resilience and provide a more predictable and reliable source of energy.
Addressing each of these three challenges will require a step change in the way infrastructure is delivered in the UK
Sponsored by Bechtel, the NPF interviewed 26 experts from across the industry, highlighting the issues large projects often face, which they found grouped into three broad categories:
- Poor planning and implementation of the project: including poor understanding of cost estimates and their use, lack of incentives for those involved early on to provide “honest” estimates, lack of the right expertise at the right time, and introduction of processes that restrict the project later in its lifecycle.
- Loss of control and responsibility: which means a lack of change control over time, cost and scope, poor visibility of data and information at all levels of a project.
- The wrong people providing the wrong type of review: there is a widely reported mismatch within the public service of people with the wrong expertise in the roles of sponsor or client. This means the wrong questions are being asked, which takes up time on the project and gives the wrong impression of project progress.
The NPF report, ‘Laying the foundations in place – how the UK government can ‘build back better’ and get up to speed post-COVID’, says 18 practical policies and industry recommendations aimed at radically improving delivery – from upgrading the skills of ministers and more experienced sponsor teams to creating a fair dispute resolution mechanism and a better approach to project costing.
John Williams, Managing Director UK and Ireland at Bechtel, said:
“We are very pleased to support this important research. The ‘race to the top’ requires a massive improvement in the UK’s capabilities to deliver transport, energy and digital infrastructure faster, cheaper and better for the communities they serve. »
Tom Lees, Director of the NPF said:
“The government has set out ambitious and potentially transformative plans which all require the effective provision of good quality infrastructure.
Infrastructure spending has historically been more than three times higher per person in London compared to the north of England. Thankfully that is changing, but my fellow Northerners can’t afford projects to be significantly delayed or over budget – we need a radical improvement in delivery so we can see the benefits as soon as possible and close the North/South divide.”
A copy of the full report can be found here:
About the Northern Policy Foundation
The NPF was created after the 2019 general election, which saw many seats in the north of England vote Conservative.
Over the past hundred years a north-south divide in the UK on a number of measures has existed despite the interventions of many different governments. Over the past 30 years, this gap has widened. Upgrading our country will be a daunting challenge, especially as we recover from the effects of COVID-19.
NPF research and work focuses on developing pragmatic and impactful policy interventions and analysis that will help the North prosper and improve lives. The FNP does not belong to any political party and avoids falling into ideological traps.