The UK needs to make a series of major decisions about the country’s energy supplies, rail network and airports, but weak processes are leading to the wrong projects and contested decisions, wasting both government time and taxpayer money.
This report 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 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.
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:
- There is no national strategy for infrastructure investment.
- Government does not devote enough attention to assessing early options.
- The more ambitious the forecast, the more questionable the model.
- Ministers and senior civil servants can fail to understand project risk.
- Government finds it difficult to make decisions which create ‘concentrated losers’.
- Inadequate evaluation misses the opportunity to improve future projects.