Only three per cent of Great British adults feel that a low overall cost of construction should be the most important measure of success of major infrastructure projects, a new report says.
The report, published today by the Institution of Civil Engineers (ICE), looks at how the built environment sector can reduce the gap between cost estimates and outturns for major infrastructure projects.
A survey of the public also found that nearly three quarters (74%) of adults agree that politicians should talk to the public more about the benefits major infrastructure projects bring, rather than the costs.
ICE’s investigation into infrastructure forecasting shows, globally, it is incredibly difficult to forecast time and cost for major projects due to there being many unforeseen issues that can arise during delivery. Despite these uncertainties, the ultimate measure of success continues to be initial cost forecasts.
The Institution recommends that the success measures for projects should shift from an over-focus on costs towards whole-life benefit. The survey data illustrates support from the general public for such a move.
Miles Ashley, Chair of the report’s Steering Group, said:
"Infrastructure is a vital part of society, with major assets helping to stimulate economic growth, improve health and well-being of the population and protect communities from the effects of extreme weather and climate change.
"We cannot continue to dismiss from the conversation these important benefits. Industry and government need to work smarter, find ways to reduce the disparity between forecasts and outturns, but also to change the narrative and ensure the wider public, the end users, are also aware of the whole-life benefits these incredible infrastructure projects are bringing to them."
ICE asked adults across Great Britain what they considered most important in deciding the success of major infrastructure projects:
- 3% said for overall cost of construction to be low;
- 17% said for the project to strengthen economic growth in the long-term;
- 27% said for the infrastructure to be reliable and cost-effective in the long-term;
- 30% said for the project to regenerate communities.
The Institution’s report, Reducing the gap between cost estimates and outturns for major infrastructure projects and programmes, makes four recommendations:
- Infrastructure owners should complete scope, design and exploration before commencement of work is allowed, to avoid scope creep or retroactive changes, taking steps to include contractors in design at an early stage.
- The Government and infrastructure owners must move away from capital cost as the most important metric when assessing project benefits, recognising the importance of whole-life economic, social and environmental value.
- Principles set out in the Outsourcing Playbook should be mandatory for Government infrastructure owners, this includes infrastructure owners undertaking should-cost modelling to help inform their expectations and knowledge of appropriate tender prices during the procurement process.
- It should be mandatory for all public infrastructure owners undertaking procurement to award contracts based on a cost estimate range, using a should-cost estimate as a reference point, with an amount of contingency allocated appropriate to the level of project maturity.
The report recognises the impact that relying on early estimates, created before full scope and complexity is known, can have on the final cost versus outturn conversation. To minimise the disparity between early and final costs, ICE recommends industry adopt the principles set out in the government’s Outsourcing Playbook. It further discusses the way asset owners can use should-cost estimations to obtain fairer and more accurate tenders.
The report also suggests how the Infrastructure Client Group’s Project 13 approach can help the sector move away from transactional arrangements towards an enterprise model.
The survey was conducted by YouGov with a total sample size of 2075 GB adults. The figures have been weighted and are representative of all GB adults (aged 18+). Fieldwork was undertaken between 12th - 15th April 2019. The survey was carried out online.
Full questions and responses:
For the following question, by 'major infrastructure projects', we mean large scale building projects which tend to require a significant amount of time and money throughout their building process (e.g. bridges, tunnels, airports etc.).
From the following, which ONE, if any, of the following do you think is the MOST important when it comes to deciding the success of a major infrastructure project in the UK? (Please select the option that best applies)
- That the projects regenerates communities (e.g. benefits those within the community, helps to ensure adequate services are available etc.) - 30%
- That the infrastructure is reliable and cost-effective to maintain in the long-term – 27%
- The project strengthens economic growth in the long-term – 17%
- That the project creates jobs (i.e. for manual labourers, engineers, architects etc.) – 8%
- That the overall cost of constructing the project is low – 3%
- The project raises the profile of the UK internationally – 2%
- Don’t know – 13%
Thinking specifically about the construction process of major infrastructure projects (e.g. bridges, tunnels, airports etc.) ... To what extent do you agree or disagree with each of the following statements?
Politicians should talk to the public more about the benefits of major infrastructure projects (e.g. job creation, improved living standards etc.) rather than the costs: (Please select the option that best applies)
- Agree – 74%
- Neither agree nor disagree - 16%
- Disagree – 5%
- Don’t know – 5%