91¶¶Òù

Last week, 91¶¶Òù members heard from Nick Smallwood, Chief Executive of the Infrastructure and Projects Authority, the government’s centre of expertise for infrastructure and major projects, kindly hosted by WSP at their office at 70 Chancery Lane. 

Nick spoke to members about the recently published National Infrastructure and Construction Pipeline, and the IPA’s projections to support the private sector in making informed decisions to build up capacity and supply chains in anticipation of major project demand. This is particularly timely as we build up to the merging of the IPA with the National Infrastructure Commission to form the new National Infrastructure and Service Transformation Authority in the Spring. The NISTA will play a key role in combining traditional oversight of UK infrastructure policy with delivery of the new ten-year National Infrastructure Strategy (NIS), also due early in 2025. 

Nick was clear that the NIS will begin to bring government departments around to a shared view on the priorities for infrastructure delivery, combined with longer-term funding settlements from Treasury to engender a longer-term approach to planning. 

The discussion coalesced around five key areas:

1. The cost of infrastructure in London – London has the unhappy accolade at the top of the global league table for construction and infrastructure costs. Enhanced specifications around safety and sustainability have been pushing prices upwards, causing London to overtake Geneva (2^nd) in the rankings, closely followed by Zurich (3^rd) and Munich (4^th). Clearly this presents a challenge to London’s international competitiveness for investment in infrastructure, more needs to be done to bear down on cost drivers for projects.
    
2. Look at the upside too – on the flipside, Nick was positive about the Government’s five core missions and focus on growth. He sees the beginnings of an institutional mindset change in Government, away from focusing solely on keeping costs low and looking also at the long-term social benefits that projects can bring, and an understanding of the important role that private finance can play. Specific reference was made to the Jubilee Line and how that project has stimulated a scale of development at Canary Wharf that was not envisaged at the outset when the business case was developed. Projects can bring benefits that aren’t necessarily as obvious at the start, but which have the potential to drastically scale up the benefit-cost equation to get them built in the first place.
    
3. Education, education, education – the NICP highlights the scale of the workforce challenges facing delivery of major programmes; to deliver the £164 billion of planned investment over the next two years, the report estimates that up to 600,000 workers will be required on an annual basis across construction and engineering professions. We need to prioritise getting more young people into construction and engineering roles, boosting apprenticeships, and making the sector more attractive for diverse talent to come through. 
    
4. Embrace AI or miss the boat (or train?) – digital and data analytics skills are increasingly important; during a period of cost inflation, particularly in construction, data and artificial intelligence will be key to boosting efficiency and saving money in the long-term, which is of particular relevance to London given cost challenges outlined earlier. AI and data can also transform project delivery capability through tools like ​‘Business Information Modelling’ and ​‘Digital Twin’ technology which can create a digital replica of a physical object, person, system, or process, contextualised in a digital version of its environment. But these innovative approaches will only succeed if the right data sources are available in the first place.
    
5. Last but certainly not least, planning! – Nick said he saw a key obstacle to project delivery in the ability of groups with very little direct stake in projects to challenge the delivery through legal, judicial review and other routes, which adds significant cost and complexity to planning and procurement. It takes the same length of time to get planning permission for major projects as it does to construct them. A 91¶¶Òù member also referred to the fact that £300m has already been spent by National Highways on the planning application for the Lower Thames Crossing alone, more than Norway spent on designing, planning and building the world’s second longest road tunnel, the Laerdal tunnel. If we don’t take action to reform and accelerate the planning and consenting process, we will continue to face major hurdles to project delivery, which will impact competitiveness for London and the wider UK over the long-term.

We look forward to continuing this collaboration with the IPA as new Government policy on infrastructure takes shape, bringing the expert views of our members to address London’s key infrastructure challenges.

For more information on 91¶¶Òùs infrastructure programme, including an upcoming briefing with the Chair of GB Energy, or to find out about getting involved in the Infrastructure Group, please get in touch with John Kavanagh, Programme Director, Infrastructure.