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HS2 underlines ‘all that’s wrong’ with UK transport policy

13 October 2023

The scaling back of HS2 shows exactly why England needs a national transport strategy, writes ICE Policy Fellow John Pelton.

HS2 underlines ‘all that’s wrong’ with UK transport policy
The long-anticipated announcement about the future of HS2 came during the Conservative party conference week in Manchester. Image credit: Shutterstock

Last month, an ICE presidential roundtable reflected on what might be different if England had a long-term national transport strategy.

How timely that question now seems!

The prime minister’s announcement at last week’s Conservative party conference underlines all that’s wrong with the way the UK does things.

Let’s start with the scale of the challenge:

  • Stop-start funding doesn’t work. Inconsistent planning has created an ‘on-off’ switch for funding that slows delivery, drives up costs, and withholds benefits from the public. What better example than HS2?
  • Central government drives short-term planning. This can lead to decisions that aren’t aligned with wider government ambitions – for example, the continued preference for investment in southeast England and London rather than addressing regional inequalities across the country.
  • Local governments have limited options. The drip-feeding of central funding in constrained-use packages prevents regional bodies from making best use of government money to address priorities.
  • There is a near-complete lack of systems thinking. For example, there’s no coherent approach to building the energy infrastructure needed to support the switch to electric vehicles.
  • The government is ignoring the transport tax issue. EVs don’t use petrol or diesel. Phasing out fossil fuels will mean diminishing fuel duty revenues, with no plan to manage the gap.
  • Incentives are inconsistent. The wealthiest have more, less tax-costly travel options, while the poorest have reduced or even no transport options.

This all means companies in the infrastructure industry face difficult choices about whether to engage with some clients and sectors, as the return isn’t enough to justify bidding for tenders.

What could a national transport strategy change?

It would be too simplistic to suggest that a strategy would solve all the transport sector’s ills.

But it could go a long way.

Here are some ideas of what things might look like now had England had a transport strategy five years ago. It’s arguably a rose-tinted perspective, but it’s food for thought.

  • Strategic transport projects are delivered by arms-length bodies. These bodies would exercise their delegated powers, without interference, to deliver clearly defined outcomes for society and the economy throughout the life of the projects.
  • Investment is steered by government policy, not fiscal necessity. A stabler, better-regulated environment is more attractive to private funders.
  • Accountability and authority sit with the right parties. Those best able to understand and realise assets’ benefits – such as local and regional governments – have control over the funding and can use alternative finance models where appropriate.
  • There’s a clear strategy for energy. The government has a plan for generating, distributing, and supplying the energy needed for England’s future transport system. This includes a pricing mechanism that enables users (i.e. passengers) to make a true comparison between transport modes.
  • Sustainable development is the primary driver. A whole-system approach to transport infrastructure, which balances short-term costs with long-term benefits, delivers real social, environmental, and economic value.
  • Systems-thinking at a national level. The national infrastructure pipeline takes a system-wide perspective before breaking down into projects. Modern models and tools, such as transport corridors and hubs and digital twins, help us better understand the system consequences of decisions.
  • There’s a base level of transport provision that applies universally. Pricing options allow wealthier users to choose additional benefits. Legacy subsidy models are a thing of the past. Operators can use reasonable price variations to limit congestion and disruption.
  • There’s an integrated, industry-wide approach to developing skills. We train and recruit people to deliver transport infrastructure based on a predictable and sustained pipeline of work.
  • Everyone understands the value of investment. There’s widespread acknowledgement that low construction costs aren’t the only measure of value. Fees help companies innovate and reinvest in people and technology to improve productivity.

Alas, back to reality!

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  • John Pelton, enterprise programme director at Costain