Why can’t Britain build any infrastructure? Delays, delays, delays…
Major UK infrastructure projects are taking far longer than they used to despite changes to planning laws, according to a new report authored by consulting group Ankura.
Delays to so-called ‘development consent order’ decisions have increased eight-fold since 2016 – despite those orders being in place to turn Britain into an infrastructure powerhouse.
DCOs are the means in which groups can obtain permission for developments categorised as Nationally Significant Infrastructure Projects (NSIP).
Introduced by the Planning Act in 2008, they were meant to speed up the process of obtaining planning permission for big developments but the report said that “timeliness” in the process has “deteriorated considerably,” in the periods under review.
A whole host of major projects have been gummed up as a result of delays to the DCOs being granted.
Dom O’Donnell, managing director at Infrastructure Matters said: “The escalation of delays in the UK planning system combined with the re-phasing and delay of major flagship projects has pushed the infrastructure sector and all UK major projects into a perfect storm.”
“The current regulatory and political environment is not only pausing the next generation of major projects and costing our country, but seriously damaging the UK’s ability to deliver world-leading projects by driving down confidence, reasons to invest, and reasons for talented next generation of major project leaders to work in UK infrastructure.”
Jonathan Roe, senior managing director at Ankura, and the report’s author, told City A.M that the reasons for the growth in delays were complicated, but that a key factor was the “level of political volatility that we’ve seen in recent years.”
“We’ve seen three prime ministers in as many months, but those changes… act as a bit of a barrier, as both the public and private sector don’t have the clarity on what policy priorities will be,” adding that the “the private sector needs stability, and it needs certainty to invest, and the absence of that has inevitably had an impact.”
The report comes after HM Treasury acknowledged in February that “the system has slowed in recent years, with the timespan for granting DCOs increasing by 65 per cent between 2012 and 2021.” It commissioned the National Infrastructure Commission (NIC) to provide recommendations.
A ‘vicious cycle’
Roe said that extended delays in the early stages could have an impact on the total cost of the project. “The longer it takes to get a decision, the more expensive the process of that whole exercise becomes.”
He added: “Inflation is very high in the UK at the moment, it’s particularly high in the construction area, and therefore the longer it takes to get a decision around a project, the greater the level of exposure of that project to the effects of inflation, so things just get more expensive.”
The report itself argues that the “vicious cycle of delay creates a vicious cycle of cost.”
It added that environment has “never been tougher” for the UK’s major infrastructure projects with “rising input costs… making projects more expensive at a time when public finances are under increasing strain.”
Lack of diversity hampering progress
Projects are also being hampered by a lack of diversity, the report argued, with gender gaps in manager and director roles still holding the system back.
Mark Wild OBE, the former CEO of Crossrail said, “my biggest single learning on Crossrail was that you needed every type of talent because the problem was difficult and complex.”
“The best teams really are a rich mix of minds. However, it’s tough for women and minorities to break through to the C-suite, and we must understand why.”
Mark Thurston, Chief Executive Officer of HS2 said, “leaders in major programmes that don’t invest in their culture will come unstuck. For us, it’s about being deliberate and relentless about our values.”
Analysis by GBM, the union for the UK’s construction sector, estimates that it will take almost 200 years to achieve gender equality based on the current rate of prograss. ONS data shows that 15 per cent of the UK’s construction workforce is female.
The DLUHC were contacted for comment.