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The dangers of silo thinking in infrastructure development

15 November 2023

Focusing on a single metric such as cost can lead to unintended consequences, writes ICE Policy Fellow Janet Greenwood.

The dangers of silo thinking in infrastructure development
We must accept the reality of increasingly frequent and severe extreme weather events. Image credit: Shutterstock

The reinforced autoclaved aerated concrete (RAAC) scandal has demonstrated the dangers of prioritising short-term cost savings in construction.

This focus on capital cost over and above wider, longer-term considerations is one example of ‘silo thinking’.

Silo thinking in infrastructure development creates sub-optimal results.

Considering whole-life value and investing for the long term is crucial – especially in the face of climate change.

We need to urgently move to a whole-life, whole-system approach that accounts for the socio-economic and environmental structures in which infrastructure sits.

Considering whole-life value – moving away from ‘outputs’

As civil engineers, we can often be very ‘output’-focused.

Much of our work is on capital projects and programmes, and it’s easy to think that handover is the end of the story.

But the end purpose of civil engineering isn’t to build things out of concrete and steel – it’s to deliver services that benefit society.

This is set out in the ICE’s purpose: “to improve lives by ensuring the world has the engineering capacity and infrastructure systems it needs to enable our planet and our people to thrive”.

This means we must focus on the purpose of the assets that we help to build and maintain, and it means taking a whole-life (cradle to cradle) approach.

It can take months and years to deliver a project, but the asset will likely be in service for decades.

Holding the promised benefits and outcomes to the end user front and centre throughout the delivery of capital projects is essential.

Investing for the long term

We’re living in volatile and uncertain times, on a path to global temperatures rising by more than 3°C.

We must accept the reality of warmer, wetter weather, and an increase in frequency and severity of extreme weather events.

Our infrastructure needs to continue to perform for society within these new weather norms.

Civil engineers must deliver that performance within a shrinking carbon budget, while seeking to enhance biodiversity and nature.

We have opportunities to contribute to levelling up and social value throughout project delivery and beyond. Every pound we spend must deliver as much benefit as possible.

Moving to a whole-system approach

We’re working within a system in which capital cost is often the focus when setting budgets.

This can create incentives to reduce capital costs while losing sight of the impact on whole-life costs, including operating, maintenance, and eventually decommissioning.

While RAAC has dominated recent headlines, the underlying issue of silo thinking isn’t new.

When making decisions about materials, focusing on a single metric such as cost or performance will likely lead to unintended consequences.

For example, a focus on the amazing insulating properties of asbestos led to its widespread use in the UK last century.

But wider considerations, such as the impact on human health or end-of-life disposal, were overlooked.

A whole-system approach at every stage of a project is necessary to address this. This means thinking beyond the individual asset into a wider system of assets, services, and environment.

This approach can initially feel complex, but it can also deliver significant benefits.

Circular economy as a solution

Circular economy tools allow decision makers to take a broad view beyond cost, to include biodiversity, social value, and environmental impacts such as waste.

The World Business Council for Sustainable Development’s Circular Transition Indicators (CTIs) is a good example.

From rails to roads and sewers to schools, significant parts of the UK’s infrastructure are coming to the end of their design life.

Many of these assets were built without consideration for maintenance or end-of-life.

Had they been designed for modular repairs, we could be identifying elements for simple replacement rather than complex, bespoke interventions or full-scale demolition and replacement.

We’re increasingly seeing the ‘right to repair’ emerge as a theme in consumer goods that have a lifespan of years.

Adopting circular principles in infrastructure assets, with lifespans of decades and centuries, will necessarily take longer – but is nonetheless essential.

Embedding whole-life value into business case approvals

Our business cases need to shift too.

They need to take full account of biodiversity and nature, social value, carbon and the environment, and resilience and adaptation.

These factors need to be embedded throughout each of the five cases (strategic, socio-economic, commercial, financial, and management) and across the asset life.

For example, management cases need to include robust benefits management, and strategic cases need to measure non-monetised benefits in detail.

‘Cost’ doesn’t mean ‘value’

Infrastructure is the foundation for our society.

Extreme weather events damage and destroy communities, sever transport links, and threaten lives. Global natural disasters cost the world economy billions of US dollars each year.

There’s little value in a project built to cost and time that fails to deliver in service.

We must move away from the traditional ‘silo’ priorities of cost, scope, risk, and time.

Whether we’re building new infrastructure or extending the life of existing assets, a failure to take a ‘whole system’ approach will cost us all dearly.

ICE Policy Fellows

ICE Policy Fellows are an active network of infrastructure experts who provide advice and insight to drive the ICE’s policy programme forward.

We’re seeking ICE Fellows to join the network, particularly those from, or with experience, outside the UK.

We support our Policy Fellows with regular briefings, training, and opportunities to represent the ICE in front of decision makers.

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  • Janet Greenwood, director at major projects advisory, KPMG