Will infrastructure investment really rebalance the UK economy?
Rarely a day goes by without a member of the government hailing the “economy-rebalancing” properties of some project or other. Indeed, if The Engineer had a pound for every such prediction, it’s possible that we might have enough to pay off the deficit and take the entire team to the Ritz for a celebratory lunch.
But while it’s tempting to be cynical in the face of a refrain that’s becoming a little tired, we decided to subject it a little more rigorous scrutiny.
In an in-depth report that will be published in the next issue of The Engineer we’ve tried to navigate a path though the political bluster, and have asked some people who really do know what they’re talking about whether they believe major infrastructure projects could play a role in rebalancing the economy?
From Crossrail and Hs2, to the £30bn programme of rail and road projects announced in the chancellor’s 2011 autumn statement, not to mention the huge changes occurring across our energy industry, the UK’s infrastructure is undergoing a pretty radical transformation.
Many commentators have questioned whether this will do much for the economy, claiming that it’s more important to boost the manufacturing sector than to throw billions at projects that will, in some cases, take decades to complete, and won’t necessarily be carried out by British companies.
But those we’ve been speaking to over the past couple of weeks tell a different story.
Nick Baveystock, director-general of the Institute of Civil Engineers (ICE) believes the sceptics are failing to recognise the long-term economic benefits of new infrastructure. New road and rail links in particular will, he claims, be a major filip for UK manufacturers making it easier for them to move goods around, and putting channels and structures in place that are essential for long-term growth.
What’s more, while guarantees that work will go to UK companies will always be a thorny issue, Baveystock claims that clear long-term plans are not only the most economically sensible way to go about renewing infrastructure, but will also enable the UK to better plan its future skills needs, thus boosting the chances of those skills coming from the UK
What’s more, according to Dr Scott Steedman, one of the UK’s leading civil engineers, fears that UK contractors could lose out are perhaps misguided. Whether or not the main contractors are overseas firms, UK workers will carry out the vast majority of the work, and most of the money invested will stay in the UK .
Another intriguing point raised by many of those we’ve spoken to is that all of this activity could create some great opportunities for the kind of UK technology firms not traditionally associated with large civil projects. With a growing emphasis on, for instance, structural monitoring systems for new buildings, or advanced sensing technologies to smooth traffic flow on roads and rail networks, the UK is ideally placed to exploit this growing overlap between once disparate areas of engineering.
Whenever politicians talk of “rebalancing the economy”, they struggle to avoid the implication that they think they’ve found a silver bullet. It’s easy to see why. Political careers are often short and they want to take the credit while they can. The reality is that the economic benefits are real, but almost certainly won’t be felt until long after our current administrators have left Westminster.