A report by the Institution of Civil Engineers (ICE) reveals that the UK’s ‘stop/start’ approach to planning essential infrastructure projects cost the UK £1.8bn in 2007.
ICE’s State of the Nation Report, on Capacity and Skills, highlights how uncoordinated planning of infrastructure projects discourages industry investment in civil engineering capacity and skills – and fails to deliver best value to the taxpayer.
According to the report, construction inflation has been running at a rate well above the Consumer Price Index (CPI), the measure used by government to calculate inflation across the economy as a whole. The ICE has calculated that, if left unchecked, this gap will have reached nearly £8bn by 2015.
‘If the costs of delivering vital water, energy, waste and transport infrastructure rise, essential projects could be scrapped leaving the public at a loss,’ said Keith Miller from the ICE.
In its report, ICE is calling for an independent commission to take a strategic overview of all major infrastructure projects and coordinate their delivery. ICE endorses the work of Northern Ireland’s Strategic Investment Board which has successfully enabled government and industry to work together to deliver major infrastructure that benefit the public.
ICE’s report identifies how the current system allows ministers to make political decisions to cut spending individually, without considering how it will affect other related services. An example was Defra’s cut of £80m in the Environment Agency budget in 2006 -07 due to problems with farming budgets which resulted in cutbacks in flood risk management funding.
ICE’s research also highlights that the UK is experiencing a skills ‘crunch’. It claims that the industry will need up to 12,300 new senior construction professionals to join each year, until 2011, if it is to meet demand for major projects to benefit the public.
The State of the Nation report is available here.