Eliminating obstacles

In June’s Emergency Budget, Chancellor George Osborne plans to cut the UK’s budget deficit included promise to review the costs of delivering infrastructure.

A comprehensive review is to be carried out by Infrastructure UK (part of the Treasury), reporting by the end of the year.

Infrastructure costs are known to be higher in the UK than elsewhere. But recent changes to the planning regime have done little to improve the position, and the review will have to address planning delays if it is to be effective.

It is perhaps no surprise then to find that capital investment in the UK’s infrastructure will have to bear a significant proportion of public spending cuts. Yet to save a third of the budget in five years will have major consequences for all sectors of the industry. Press reports have speculated on cuts of anything up to 40 percent of capital spending, leading to the potential for a devastating impact on the country’s infrastructure sector and no doubt cuts of this scale will lead to mounting bills later.

In the continuing national debate about where the axe should fall, infrastructure will have to play its part, but economies achieved through more efficient delivery will always be preferable to indiscriminate cuts.

In London, the tube upgrade and water main replacement programmes are already underway. Hopefully that momentum will not be lost. But CrossRail is still at risk through budget cuts to big projects – potentially leaving unsightly preparation works on hold for years. High Speed Two is also in danger of disappearing even further into the future. If essential subsidies for renewable energy projects are scaled back too, this will impact on environmental sustainability targets at many levels.

Spectacular cost overruns on large projects are pretty familiar. This is as good a time as any to improve budgeting and cost control. At present, major projects in the transport, energy, waste management and water supply sectors can easily take ten years to clear the planning process and such delays have considerable cost implications. However is undeniable that much of the country’s infrastructure is already long overdue for replacement.

The outgoing Labour government introduced a new planning regime for major infrastructure projects in 2008, setting up a wholly new decision making quango in the form of the Infrastructure Planning Commission (IPC). This was to have determined projects in accordance with a set of nationally-agreed policies. The incoming coalition government, following both Conservative and Liberal Democrat manifestos, has dissolved the IPC but endorsed the general intention to speed up the planning process for these important projects, subject to the restoration of political accountability.

The 2008 regime however introduced detailed and extensive guidance on the need for pre-application consultation on these types of projects. Both are extremely demanding and open-ended. For example, under the published guidance, which is still extant, promoters even have to consult the local planning authority for the area on how they should go about consultation – effectively, consulting on consultation. The list of potentially interested parties to consult is also both long and indeterminate. The methods recommended include everything from citizens’ panels to the media, via telephone polls, internet sites and drop-in sessions. Once the whole process has been exhausted and the local planning authority reports its views to the IPC, it can still object on the ground that insufficient consultation has been carried out.

Although there is general agreement on the need to accelerate the planning process for these projects, the scale of pre-application consultations required from infrastructure promoters remains largely unchanged by the coalition.

Unless this is tackled, the claims of speeding up the system and promoting greater efficiency must be regarded with some suspicion. As happened with changes to the development planning system in 2004, there is a danger that planning delays are just being shifted backwards in the process, leaving intact the considerable deterrence to investment that can result from a costly and complex planning system.

If the substantial public sector spending cuts are in anticipation of the private sector taking on the burden of infrastructure provision, then the planning system needs to act in concert with this approach rather than having additional time-consuming and expensive processes added to the programme of delivery.

Michael Lee-Wright is environmental planning director at GL Hearn