Cautious optimism for the future of major infrastructure projects

Boris Johnson, despite previous opposition to Heathrow and scepticism about HS2, appears to want to splash out on major infrastructure. But words must be backed with action

When assessing the future of UK infrastructure, all eyes are now on Prime Minister Boris Johnson, known for his long-term criticism of HS2 and Heathrow. However, the more positive noises about infrastructure spending he has been making recently should not be dismissed as mere campaigning.

Johnson has suggested that he will press ahead with HS2 even if the price exceeds £100bn. He told Birmingham Live “there’s no one more fanatical about major infrastructure projects than me. I’m going to hesitate for a long time before scrapping any [such] project.” He has asked Douglas Oakervee, former HS2 chairman, to review its scope and value for money. However, the review could go in any direction and could get caught up in a possible general election, making the outcome highly volatile.

In the same month, the prime minister announced his desire for a faster rail route between Leeds and Manchester, claiming the benefits would be “colossal”. He said the full details of the Leeds-Manchester route would be published in the autumn, following the review into HS2.

We need champions

“Infrastructure needs champions. These things don’t happen by accident, so it’s good to have optimistic people in charge,” says Tony Meggs, chairman of Crossrail.

APM president Sue Kershaw says that “infrastructure actually helps you pull your country out of the mire when things are pretty bad. If we are heading for another recession, it will be infrastructure that will pull us out. It did last time.”

“I think that it is reasonable to be optimistic,” says Nick Davies, programme director for infrastructure at think tank the Institute for Government. “[Johnson] is much less committed to balancing the books than his predecessors have been. Particularly in the case of a no-deal Brexit and a need to kickstart the economy, that kind of supply-side investment might be the type of thing he is looking at.”

Davies believes Johnson is “clearly trying to shore up areas in which the Conservative Party has been weak in recent years. He has been very positive about Northern Powerhouse Rail, and a £3.6bn towns fund has also been announced.”

Davies also points out that chancellor Sajid Javid has confirmed that the national infrastructure policy will be published in the autumn. “The national infrastructure policy will be the first concrete indication of what this government’s priorities are. It’s really important that they get this right. To be successful, the policy needs to set out what the priorities are and, if there are new projects, what is going to be deprioritised in order to focus on that.”

Long-term certainty needed

David Whitmore, head of energy at consultancy Pcubed, warns that: “What people say has got a very short-term focus to it, and what we need are people with a real long-term vision. It is great to hear the prime minister talk positively about investment in technology and infrastructure projects, but we have to recognise that, realistically, anything that’s said at the moment has a short-term focus. Let’s get to the other side and reach a stable political environment, and then we’ll see what the policies are.”

Mark Williams, property and infrastructure lead at PA Consulting, says that the National Infrastructure Delivery Plan details projects worth around £600bn. He adds that we should expect a push on many of these. “The prime minister and chancellor want to boost the economy. They have emphasised the importance of infrastructure, easing some of the fiscal restraints and making announcements about rail investment in the North and accelerating delivery of fibre broadband.”

Yet what the project profession really needs are clarity and commitment. “This may be a challenge given the government’s small majority, but they need to provide that leadership so that the industry can respond with confidence. It doesn’t all have to be through megaprojects either; a programme of smaller projects can ignite value in the regions and help rebalance the economy,” says Williams.

Back in May, Britain’s National Infrastructure Commission chair Sir John Armitt wrote to then chancellor Philip Hammond demanding more money be spent on national infrastructure. Armitt complained about the gap between “vague promises” to do something and anything actually getting done. “The government must not deliver a weak strategy that pays only lip service to our recommendations,” he wrote.

In December 2018, the government announced £412bn of road, rail and energy projects, but Armitt considered that just £30bn-worth had a realistic chance of happening.