The report - Tackling the Infrastructure Puzzle – calls on government to set out a long term strategy for infrastructure, overhaul the planning system and reform procurement.
Improvements to transport, energy and IT communications could boost the economy by £10bn a year, the authors reckon.
The report was produced by the BCC’s Business Infrastructure Commission, an independent group of business and industry leaders chaired by Prof David Begg.
It says that the UK suffers from some of the most congested infrastructure in the developed world and a failure to invest in these will have serious impacts upon the country’s long-term economic future.
Professor Begg said: “The UK has one of the most heavily used infrastructure networks in the developed world. This is why it is critical to encourage further investment so that UK infrastructure is fit for the future. By infrastructure, we mean transport, energy supply, and digital communications networks – the backbone of business and our economic health.
“Increased levels of investment from both government and critically from the private sector must also be matched by a long-term infrastructure strategy. This has to include a focus on how we develop a skilled workforce to deliver these projects, an overhaul of how we procure and build new publicly funded infrastructure, and a planning system that is fit for purpose. For example, there are savings of £2-3bn annually to be found through more efficient procurement.
“Our ability to move goods and services around the country, and doing business online, is crucial to our economic vitality, particularly in stimulating regional economies. Without investment and a long-term infrastructure strategy, our economy may be hindered by networks that cannot support its growth.”
The “five pieces of the infrastructure puzzle” identified by the report are:
1. Long-term Planning
- Complete a 10-40 year National Infrastructure Plan as a matter of urgency giving confidence to investors, providers and users.
- Drive implementation of the National Infrastructure Plan through a strong, independent and empowered Infrastructure UK.
2. Procurement Reform
- Task the Cabinet Secretary to complete a review of infrastructure procurement capacity in Government to drive down complexity, inflexibility, over-specification and unnecessary costs.
- Revise Green Book appraisal processes to privilege innovation in infrastructure procurement while retaining a focus on whole life-cycle costs.
3. Planning Reform
- Subject Ministerial decisions on nationally significant infrastructure projects to Parliamentary scrutiny where a Minister’s decision goes against a positive recommendation from the Major Infrastructure Planning Unit.
- Encourage the cost effective use of Planning Performance Agreements (PPAs) to secure local authority engagement and speed up the planning process for some major infrastructure projects.
4. Attracting Private Finance
- Extend the Regulated Asset Base model to additional infrastructure sectors and networks in need of long-term investment.
- Enable the pensions and insurance industry to increase levels of investment in infrastructure by introducing a stable and regulatory framework and appropriate incentives.
5. Skills Provision
- Develop a responsive skills strategy for infrastructure and incentivise colleges and businesses to deliver the skills required to build national and regional infrastructure projects.
- Simplify bureaucracy surrounding apprenticeship schemes to make it quicker, easier and more cost effective for infrastructure providers to take on apprentices.
The full report is available by clicking here.
Industry reaction
The report has been well received by the Civil Engineering Contractors Association, which said it was “a clear sign that those private-sector businesses tasked by the government with leading the economic recovery, view an efficient and effective infrastructure network as crucial to their ability to generate growth”.
CECA director of external affairs Alasdair Reisner said: “That this report comes from the very businesses the government expects to lead a return to growth should make it impossible to ignore.
“This report also vindicates the approach CECA and other bodies have taken over the past year to emphasise the importance of infrastructure to any economic recovery, and the need for new practices and sources of investment to keep delivering infrastructure while government finances remain uncertain.
“Recent moves on the part of the government have shown an awareness of the issues raised in this report, for example the publication of a visible two-year project pipeline and changes to procurement practices announced by IUK. This report demonstrates that these measures were in line with the needs of industry and also highlights some further potential areas for reform.”
Members of the Business Infrastructure Commission
- Professor David Begg, chairman
- David Frost, director-general, British Chambers of Commerce
- Stephen Burgin, president, Alstom UK
- Kathryn Oakley, director of public policy and affairs, Openreach
- Nigel Foster, director, Arup
- Stuart Walton, director, Conspicuous CBM Ltd
- Kanat Emiroglu, managing director, British Gas Business
- Andrew Barron, chief operating officer, Virgin Media
- Duncan Bonfield, director of external communications, Network Rail
- Simon Wells, head of planning and environmental law, RWE nPower
- Simon Godfrey-Arnold, director of transformation, Mouchel
- Andy Godfrey, public policy manager, Boots
- Tony Collins, chief executive, Virgin Rail
- Mike Forster, director, Forster Associates
- Richard Abel, managing director, Macquarie Infrastructure and Real Assets
- Martyn Pellew, formerly group development director, PD Ports
- Ian Frost, policy manager, Heathrow Airport
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