The UK needs to make a series of major decisions about the
country’s energy supplies, rail network and airports, but a new
report says weak processes are leading to the wrong projects and
contested decisions, wasting both government time and taxpayer
money.
Published today by the Institute for
Government (IfG), What’s wrong with
infrastructure decision making? argues that making
decisions about infrastructure is one of the most important but
difficult tasks for the UK government.
High-quality economic infrastructure – energy, transport,
utilities and digital communication – supports successful
economies. Well-chosen projects contribute to job creation and
increased productivity. That is why the Government is planning
£245bn of economic infrastructure projects over the next five
years.
But the report warns that poor investment decisions could lock
the economy into inappropriate infrastructure systems for many
years, with significant harmful effects on future prosperity. Bad
investments can result in white elephants – projects that waste
public money and fail to deliver the promised economic benefits.
The report also notes that not all infrastructure projects are
equal. Looking at major decisions, from High Speed 1 to Hinkley
Point C, it is clear that government does not always identify the
best investments. This is a serious problem.
Nick Davies, Research Manager and report co-author, said:
“Britain desperately needs upgrades to its infrastructure. But
too often projects are given the green-light based on
questionable assumptions, a lack of strategy and without learning
from past mistakes. Government decision making must improve
significantly if we want to reap the benefits of smart
infrastructure investment.”
The report examines six large and controversial
infrastructure projects: the Heathrow third runway, High
Speed 1, High Speed 2, the Thames Tideway Tunnel, Hinkley Point C
and the Jubilee Line Extension.
It finds there are six reasons why the UK struggles to make
decisions on infrastructure:
- 1. There is no national strategy
for infrastructure investment.
- 2. Government does not devote
enough attention to assessing early options.
- 3. The more ambitious the
forecast, the more questionable the model.
- 4. Ministers and senior civil
servants can fail to understand project risk.
- 5. Government finds it difficult
to make decisions which create ‘concentrated losers’.
- 6. Inadequate evaluation misses
the opportunity to improve future projects.
