26/03/10
Improving the national infrastructure is vital, but too often other things have priority. How the blockers are being overcome.
Last summer I suggested that a national infrastructure debate had begun. National competitiveness and consumer expectations were driving new attitudes. What was often seen as the 'back-office' of modern life was attracting more attention.
Now, at the start of a new decade, there are reasons for optimism that talk is turning to action.
First, the economic collapse has made many governments, companies and even consumer groups see that there is more to consumer societies than consumption; wealth depends on the quality and availability of what everybody needs, not (or not just) what everybody wants. This is no trivial distinction. Effective transport, energy and water services, broadband and flood protection do not just separate us from the primitive past or undeveloped nations. Properly valued, they are as worthy of social and individual aspiration as the things we normally associate with advanced societies such as car ownership, universities, Starbucks and HDTV.
Second, we know where the obstacles are, and what to do about some of them. There is useful progress in tackling planning delay; creating the right environment for investment; and treating infrastructure more as an integrated system, not just as individual services. On the other hand, more must be done to understand the public’s perception of infrastructure employment and the effect on recruitment.
Planning
There has long been agreement that critical infrastructure planning badly needs reform. The waste and blight of unsuccessful applications and cost of long enquiries are toxic symptoms of an abyss between national or regional needs and local or special interests. At the heart of the problem is the remit of local democracy.
The government’s solution was the Planning Act 2008. The Act created the Infrastructure Planning Commission and National Policy Statements subject to parliamentary scrutiny. Applications for Nationally Significant Infrastructure Projects falling within an NPS framework will, from this month, be referred to the IPC for examination and decision. Wastewater and water supply NPSs are promised for spring and late 2010 respectively. If they won the election, the Conservatives have said they would abolish the IPC, but retain the policy with a “democratically accountable version of the….system introduced by Labour”.
Investment
The estimated cost of bringing UK infrastructure up to snuff in the next decade is huge. In energy alone up to £200BN will be needed, with both regulator and experts doubtful that current market mechanisms can deliver. The government has recognised the problem. In November it set up Infrastructure UK to identify new revenue streams and guide the Treasury on investment policy. I-UK will also report to the Department for Energy and Climate Change and Treasury on development of major infrastructure and transition to a low-carbon economy.
In contrast to other sectors, water and sewerage expect to build on a great record of investing without taxpayer subsidy. Steady returns, delivered over time, may well put them at the head of the queue despite doubts raised during PR09; and capital markets may well devise new ways of channelling funds to all sectors. But complacency would be foolish. Investors always have a choice, and growing demand for funds will inevitably mean tighter competition.
Integration
For much of the last century, and even the last decade, the different government-owned and regulated services developed more or less independently of each other. They are natural partners, but partnerships were never much encouraged. Now change is in the air. Ofwat, government and opposition are planning water reviews; all, to some degree, accept that collaboration is part of sustainable development. Equally positive, the government has said that Infrastructure UK should "consider the interdependencies between different types of infrastructure, and where there are efficiencies and synergies to be exploited".
Skills
For many reasons, including some referred to above, infrastructure is set to provide good careers well into the future. But how many people know this? Could progress be held up by a shortage of skills or traditional perceptions of infrastructure as unexciting? Energy and Utility Skills (the sector skills council) thinks so and warns frequently about the implications of an older than average workforce.
Everyone concerned has responsibilities here. The misperceptions, if that is what they are, may only be corrected with a shift in public opinion about what is important and this could take a long time. But government and regulators could speed things up by looking again at the priority in price controls placed on cost efficiency over all other measures of value.
This is not to argue for lighter regulation, merely to question the effect on an industry's reputation for attractive public service careers of periodic price reviews followed by substantial cuts in the workforce.
A version of this article, by Barrie Clarke, appeared in Water & Wastewater Treatment magazine, March 2010
