Monday 28th May 2018
Lilian Greenwood, Chair of the Transport Select Committee and Labour MP for Nottingham South
The UK’s transport infrastructure is set to benefit from investment worth several tens of billions of pounds. But is that going to produce the outcomes which the Government wants: rebalancing of the economy and enhancing productivity; better reliability and less congestion; improving global competitiveness and encouraging Foreign Direct Investment; and supporting wider social benefits like new jobs and housing?
Recently, the Institute for Government (IfG) identified six reasons why the UK struggles to make decisions on infrastructure. Firstly, the lack of a national strategy for infrastructure investment; secondly, a failure by the Government to devote enough attention to assessing early options; thirdly, uncertainty in long-term forecasting, which means that sometimes schemes turn out to be more costly and difficult to deliver than initially thought; fourthly, a failure by Ministers and senior civil servants to understand project risk; fifthly, difficulty making decisions on projects which have geographically wide-spread benefits but locally concentrated disadvantages; and finally, inadequate project evaluation that misses the opportunity to improve future projects.
The IfG called for action under three broad themes: time, quality and cost. It said: To enable more timely decisions, the Government should strengthen the national Infrastructure Commission and create a Commission for Public Engagement; to enhance the quality of its decision-making, the Government should develop a cross-departmental infrastructure strategy and improve its use of cost-benefit analysis; and to better manage costs, the Government should more systematically collect data, ensure it learns from past projects and improve its approach to accounting, appraisal and budgeting.
That requires effective scrutiny by Parliament, principally via select committees.
The work which the Transport Select Committee has done, so far, on the Airports NPS speaks to the issues of timeliness, quality and cost identified by the IfG. Expansion at Heathrow, which has been delayed for decades, is likely to bring UK-wide economic benefits but at a cost to local communities. It is difficult to make robust forecasts of the effects of airport expansion on complex outcomes such as employment, investment and regeneration. And there are concerns about scheme cost (particularly air quality, carbon and surface access costs).
My Committee looked at the cancellation of rail electrification schemes. The cancellation of electrification works in three schemes (affecting the Midland Mainline, Great Western Mainline and Lakes Line) was announced on the day that the House of Commons rose for the summer recess in 2017. The decision to implement partial electrification using bi-mode rolling stock was sold to the public as a boon to passengers. But after questioning the Secretary of State about it on 16 October 2017 and 22 January 2018, and failing to get straight answers, I can only assume that the problems arise principally from a failure to understand and manage the costs of the large-scale electrification projects that were considered essential only a few years ago.
Our scrutiny raises questions about the decision-making process within the Department for Transport. It is an example of a lack of clarity about, and very poor communication of, the Government’s use of benefit-cost ratios in decision-making. Our work on rail infrastructure investment has also highlighted the problems which arise from a failure to link investments to a wider strategy, particularly in relation to the rhetoric about rebalancing the economy towards the regions.
London and the South-East receive a disproportionate share of transport investment, and some people question whether the North of England receives a “fair share” of expenditure. Transport is a key enabler of economic growth, and if the political rhetoric around rebalancing the economy is to be realised, then there has to be much greater attention paid to differences in regional spending. Aside from spending on roads, London receives significantly more spending per head of resident population on all other forms of transport expenditure. The Government’s justification for that is that it reflects the relative concentration of public transport around London and that the spending profile is skewed by the current portfolio of projects. The Secretary of State has recently published the National Infrastructure and Construction Pipeline to show what projects are planned, and what spending patterns will be in future years. But there is a big difference between data showing what has been spent and a breakdown of what might be spent in future years. It is not yet clear to me what effect the pipeline will have in practice, how it will ease the political wrangling that dogs so many infrastructure projects, and ultimately whether it will address concerns about regional disparities.
Whatever happens, we need to see action by the Government to improve its understanding of costs and value, better manage large complex schemes, accelerate delivery of projects which are underway and better manage project risk. All of that should be delivered within the framework of a national strategy.