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29/07/2020

Major infrastructure schemes ‘need better coordination’

Words: Laura Edgar
Infrastructure construction / iStock-95396741

Better coordination of local infrastructure projects, long-term tracking of performance and greater transparency of delivery is required or the government risks ‘squandering’ billions of pounds, according to the Public Administration and Constitutional Affairs Committee.

The committee said the government’s ‘levelling-up’ agenda risks leaving “a legacy of white elephants without [a] culture change on handling of major projects”.

Delivering the Government's Infrastructure Commitments Through Major Projects urges the government to clarify its overall aims for major infrastructure spending as soon as possible. It should also provide greater detail on how it will support economic development and regional growth.

There are 125 projects in the major projects portfolio, amounting to £448 billion. These include the expansion of Heathrow Airport with a third runway, Crossrail, welfare reforms such as universal credit and 30 hours’ free childcare, and military programmes including HMS Queen Elizabeth. In addition, the committee notes that after the 2019 general election the government set out its intention to “level-up” the economy by investing in infrastructure, more money for which was announced as part of the recovery plan for the Covid-19 pandemic. 

The committee thinks the aims of these infrastructure investments are “ill-defined” on how they would contribute to levelling up. It recommends that the government should clarify what levelling up means and set out a coherent plan for coordinated infrastructure investment that delivers definitive long-term benefits on a local and national level.

The committee wants greater detail to be provided on the data that will be used to assess performance, including how it will be recorded and published.

Delivering the Government's Infrastructure Commitments Through Major Projects states that “there is a clear risk that money will be spent on projects which might boost employment in the very short term, but will not lead to longer-term change in economic outcomes for the poorest parts of the country”.

The framework for this investment should be provided by the yet-to-be-published National Infrastructure Strategy. This needs publishing to ensure that any money spent is done in a “coordinated and effective way”". 

The committee said the strategy should be published "as soon as possible, and certainly before [the government] starts spending large amounts of money on infrastructure”. 

The MPs added that the plan must “clearly link the government’s objectives for the economy and the planned infrastructure investment”. 

“It should either include an assessment of regional or local needs, or clear principles for departments assessing need in areas in which they are investing,” the report states.

The Cabinet Office must also ensure that infrastructure programmes are coordinated to “avoid a scattergun approach that has plagued major projects historically”.

The report makes a number of other recommendations, including:

  • Individual projects should be set up and run with a focus on achieving stated benefits. Mechanisms should be put in place to enable greater scrutiny of this performance in the long term. 
  • The Infrastructure and Projects Authority (IPA) should report on performance against benefits plans for individual projects, including a standardised financial measure and narrative on transformational benefits promised, in its annual reports from 2021-22. 
  • The government needs to be clear on the objectives of that investment, and set a framework for departments to appraise that investment so that it can pass the TAP hurdles. That might mean accepting lower overall returns for wider benefits, including local regeneration and levelling up. 
  • HM Treasury should update its Green Book as promised, in particular to reflect these wider government objectives. There is a pressing need to publish this update so that new infrastructure investment can be appraised in accord with its guidelines. The committee suggests it should be published no later than September so that post-Covid spending can be appraised using the updated guidelines. 

Committee chair William Wragg said: “Developing grand infrastructure projects must not become an end in itself and we must move away from the short-term view that measures the value of major projects in terms of whether they are finished on time and at the expected cost. As the nation embarks on a period of significant infrastructure spending we must focus on how much they deliver the benefits they set out to achieve and were the basis for being given the go ahead.”

He wants to see improvement in how projects are developed at a local level. “It will be critical not just to get local support for infrastructure projects, but getting local input in identifying problems and developing solutions must be better supported and become a feature of programme development at a much earlier stage.

“Investing time at the outset to make sure everyone is clear about the aims and proposed benefits, alongside a change in the culture of how major projects are developed and managed, should mean that this transformative change is achievable.”

The report and recommendations can be found on the UK Parliament website.

Image credit | iStock

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