Spot the UK infrastructure plan

Danny Alexander, possibly asking for help with his infrastructure plan

Danny Alexander, possibly asking for help with his infrastructure plan

There was a bit of an announcement about the UK government’s infrastructure policy the other day from Chief Secertary to the Treasury Danny Alexander, but I didn’t get round to reacting to it at the time.  That doesn’t bother me greatly, as there wasn’t much in it to report.

As has already been reported and ranted over everywhere else, there was no increase in the funding already committed at the spring Budget; those Budget figures show capital investment flatlining till the end of the decade; and claims to have the biggest rail investment programme since Victorian times, or higher capital spending as a proportion of national income than before, look shaky.

So no new money and hardly any new projects*. What’s to say about government infrastructure policy?

The very fact that not much has changed is newsworthy. Over the past year, mainstream journalists and politicians have slowly been cottoning on to what the investor community and their advisers have been saying since it was born in 2010: the National Infrastructure Plan is not a plan at all. A plan would have a strategy running all the way through it, a way of ensuring that all the projects involved got delivered. The NIP, on the other hand, consists of a few discrete government policies (a loan guarantee scheme for infrastructure projects, a government lending scheme) plus mention of private sector initiatives (such as the Pensions Infrastructure Platform) and finally a massive spreadsheet listing hundreds of projects.

The projects list throws together projects with public funding, private funding and public-private partnerships; projects that are already being built; projects that have no funding committed; and projects that were announced years ago. It is far too huge and heterogeneous to ensure that everything in it will happen, and it is simply a roundup of stuff that would be in the pipeline whether there was an NIP or not. It does not reflect any desire to use infrastructure in a targeted way for strategic goals (e.g. lowering carbon emissions, universal broadband access). In short, it means nothing and adds nothing. Last year, the Treasury reflected the importance of this mighty spreadsheet by giving up on updating it every quarter.

The announcement two weeks ago does give certainty for a longer period than we’ve had before, from now until 2021. Which is good. But there’s still no rhyme or reason to the whole thing, no more certainty that there will be a smooth pipeline and no vision in terms of totally new projects.

One must look closer to find evidence of the government’s direction of travel. One such nugget is that they have done what I suggested they do last March, which is give the Highways Agency long-term planning capability. This they are doing: the HA will become a publicly owned corporation with power to borrow money and have investment programmes spanning several years, like Network Rail.

Another is the decision to set up what are cryptically described as “specialist delivery units with the commercial expertise to drive project management and implementation”. Each unit will be dedicated to delivering a major economic infrastructure project (so not a hospital, school, waste project etc). Would they be outsiders drafted in or civil servants? If they are anything like, say, HS2 Ltd, I guess they’ll be a combination of career civil servants and outsiders brought in on the government payroll.

*By ‘new projects’ I mean projects not previously committed to by a central government department. A quick skim of the ‘Investing in Britain’s Future’ document reveals only one: electrification of the Gospel Oak to Barking railway line in East London at a cost of £90 million.

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About René Lavanchy

You can contact me at rene dot lavanchy at googlemail dot com.
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