Lord Deighton spoke to conference delegates about infrastructure in the UK.
I came into government two years ago to help this country build the infrastructure we need. It clearly can’t have been an accident that we had Isambard Kingdom Brunel – as portrayed by Kenneth Branagh – as one of the stars in that spectacular first scene in the Olympic Opening Ceremony.
My mandate from the PM and Chancellor was 3-fold: “Delivery, delivery, delivery.”
You can’t have a successful 21st century economy without 21st century infrastructure.
Infrastructure is vital to improving the productivity of this country – and it is at the heart of ensuring the UK’s long-term economic competitiveness.
Successive governments chronically underinvested in infrastructure for decades. And the approach to driving project delivery was simply not dynamic.
We’re turning all this around. Our level of investment in infrastructure is now at an annual average of £47 billion a year – up by 15% in only four years.
That would be an important sum at any time. Against the backdrop of a domestic economy recovering from financial crisis, a challenging international economic environment, and the record deficit we inherited, it is remarkable.
My job is to transform and modernise how we plan and deliver our infrastructure – injecting some private-sector dynamism into the system.
That means getting major projects built on time and on budget.
It means providing certainty to businesses about opportunities ahead.
It means reducing the long-term cost of delivery.
And it means providing the right environment for building and investment to continue over the decades ahead.
All of this is good for the industry – and good for the nation.
In 2010, one of our first actions as a government was putting together a National Infrastructure Plan, based on an infrastructure pipeline – setting out exactly what we want to build and when we want to build it, and committing ourselves to getting those projects delivered.
And every year we have updated and expanded the Plan.
We can all see the progress. Last year 45% of all projects in the pipeline were in construction or part of an active programme. This year it’s over 60%.
And there have been some real, headline successes since 2010.
55 major roads and local transport projects completed.
Diggers on the ground for transformational projects such as the Mersey Gateway and the Northern Hub.
Crossrail, the biggest construction project in Europe, on time and on budget.
Improvements to 400 railway stations, including the completion of Kings Cross.
Enough new electricity generation capacity created to power 23 million homes.
We’ve seen leaps forward for HS2 and Hinkley Point C.
We’ve seen development consent granted for the Thames Tideway tunnel – which will provide a significant boost to jobs and benefit both the environment and the economy.
Britain is building its way to prosperity. And that progress couldn’t have happened had we not focussed on how we deliver these projects.
We knew that as a business, you don’t plan capital projects for one year ahead; you plan for at least five, and often longer.
So we put in place reforms allowing us to commit to long-term capital settlements. Not: “what do we have money to do next year” but “what do we have money to do through to 2020?” All this is based on a clear sector by sector strategy.
We did that last year for roads and for flood defences – and this year we are providing fuller details on how that money will be spent.
Improving pipeline visibility and certainty is of course vital. Focussing on key investments through our “Top 40 priorities” has allowed us all to concentrate our resources on the most important projects.
But what’s equally important, I know, is for the planning regime to work effectively.
We’ve reduced red tape and introduced the National Planning Policy Framework to make it easier for sustainable projects to get the necessary permissions to get started. The streamlined application process for our biggest projects is working well, with 97% of decisions being made on time, and we’re speeding up the judicial review process too.
And today, I can announce that we will be publishing a consultation paper at the next Budget to streamline and update the Compulsory Purchase Regime, to make it clearer, faster and fairer.
“Certainty” is a word I keep coming back to. Because certainty – whether on timings or on future demands – is vital to keeping costs down.
In 2010, we launched the Infrastructure Cost Review, to examine how to reduce the costs of delivery. I am delighted that government and industry have worked together to reduce the costs of delivering infrastructure by around 15%.
This is a fantastic achievement.
It means that we can afford to put more on the shopping list.
And it means that your businesses are leaner, smarter, fitter – improving your ability to compete worldwide.
Another example of how the work we are doing is good for the industry and good for the nation.
I am personally very proud that we are reversing the tide of underinvestment.
But – unsurprisingly – I think there’s more we should be doing.
We need to address the challenge of having enough skilled people to deliver projects across sectors. This is a challenge I’m throwing down to industry.
Modelling of the infrastructure pipeline suggests that the unprecedented increase in investment will in turn create a surge in demand for infrastructure jobs.
The figure we’re working to is over 10% by 2019. And for some specialised skills, the number is much higher.
In October, here at ICE, I launched the IUK and Infrastructure Client Group work programme – which is focussed on getting to grips with this significant challenge.
This government is already investing in the skills needed to deliver the pipeline.
We have a new £30 million fund seeking to boost the supply of engineers, especially female engineers.
In addition to existing colleges, catapults and the National College for High Speed Rail, we’re working up plans for new centres for Nuclear and Shale. And we will shortly be setting out more details about this extension to our National Colleges Programme.
But government can’t do it all by itself.
Crossrail and the Olympics recently exceeded its target of hiring 400 apprentices.
We want to incentivise a step-change across industry in the levels of investment in skills, for instance through setting clear and consistent objectives in procurement.
But industry must also now build on the certainty – that word again – provided by our infrastructure pipeline, and respond with greater confidence, through increased investment in the skills and innovation needed to deliver it.
So – in summary – we’ve got infrastructure embedded at the top of our economic priorities.
And we have a detailed plan, updated and improved every year, for all the sectors, backed by a clear financing plan, using public money and the private markets supported by targeted interventions like the UK Guarantee Scheme.
All reinforced by constant improvements to our delivery capability whether through streamlining planning, investing in skills or upgrading the capability of government agencies.
We’re committed to seeing this through and thank you for your support.