Almost everything the country does is enabled by, or built around, the nation’s strategic infrastructure network.
The water you use to brew your first cup of tea of the day is fed through the nation’s water pipe network. Our roads and rail networks act as arteries from top to bottom. Our sewer network keeps you in good health, just as the flood defences keep you dry. The very device you are using to read this is dependent on electricity delivered through the national grid.
As your body needs food, infrastructure needs investment. Between 1980 and 2011 the UK spent less per capita than the US, Canada and France on infrastructure. To address this historic underspend the Government have pledged spending of between 1 and 1.2% of national GDP on infrastructure until 2050 with similar amounts being spent by the Private Sector.
This increase in investment is welcome, but we need to ensure that it is well used, so that it doesn’t just match our future need, but improves the day to day lives of the entire population.
State of the Nation
In October ICE will publish our annual State of the Nation report. This document will explore opportunities for investment and open a conversation about how we can better fund and finance the nation’s infrastructure.
It will look at ways to make best use of the money invested, encourage additional finance by supporting private investors and explore better ways to pay for the infrastructure we all use.
This report is especially timely in the wake of the National Infrastructure Commission’s publication of the National Infrastructure Assessment and follows naturally from ICE’s National Needs Assessment published in 2016.
ICE has published an annual State of the Nation report since 2002, concentrating on devolution in 2016 and digital in 2017. 2018’s report, led by the steering group I chair, is looking at two key questions;
the challenges the nation faces in terms of future need,
interventions that Government can make to attract greater private investment.
Our investment challenge sits in a shifting landscape. In twenty years’ time our roads may be populated by a fleet of entirely zero-emission vehicles.
Britain’s exit from the European Union may constrain some avenues of finance yet open up others and Britain’s position as a leading centre of thought and delivery must be maintained.
There is a constant challenge even today with keeping the lights on, water, oil and gas flowing, and ensuring a timely and quality transit system, one which is only going to grow in the coming decades.
The (ONS) predicts that by 2026 the UK population will increase to 69.2 million and we will need to build the equivalent of ten and a half Hinkley Point C’s to accommodate this growth and at the same time replace the capacity that will be lost through decommissioning old power generating plants.
To avoid drought caused by climate change our pipes will need to transport an additional 4,000 mega liters of water every day and highway transport bottlenecks mean that congestion will cost us 8.6bn by 2040 if we don’t act today.
The UK is a world leader on innovative solutions supporting finance in infrastructure. Private Finance Initiatives have been adopted throughout the world, the Regulated Asset Base model is delivering roads in Australia and pipelines in South Africa just as they deliver record amounts of private investment in our water and energy sectors.
These solutions are not perfect, however, and there is much we can do to learn lessons and implement best practice from around the world that will encourage private investors supporting our infrastructure plans.
We cannot allow a future where we are ranked 27th in the world for quality of overall infrastructure as the last World Economic Forum’s Global Competitiveness report found.
The final report will be published on the 18th October. In the run up to publication, members of my steering group will outline their thoughts on the significance of the report on the Infrastructure Blog.
If you would like to find out more information, or would like to contribute your thoughts, please email: [email protected].
Paul Sheffield has a wealth of infrastructure experience. He was previously Managing Director at Laing O'Rourke and Chief Executive Officer of Kier. In addition to chairing ICE's State of the Nation steering group this year, Paul is also a future President of the Institution.