Weak infrastructure plans wasting time and money

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.

 

ENDS

Notes to editors

  1. The full paper can be found here (from 00.01). It is the first in an IfG series on infrastructure decision making in the UK. 
  2. The Institute for Government (IfG) is an independent think tank that works to make government more effective.
  3. For more information, please contact nicole@instituteforgovernment.org.uk / 07850313791.