Second Report - Major transport infrastructure projects

Subject to devolved responsibilities, the National Infrastructure Strategy’s top-level objectives of supporting the UK economy after coronavirus, addressing regional inequalities and facilitating adaptation to climate change are welcome. However, the Government is yet to articulate the detail on how it will achieve those objectives.

The Government may need to amend the National Infrastructure Strategy to account for the evolution of the coronavirus pandemic in the 10 months since the strategy’s publication. To assess whether and how the strategy requires revision, the Government must examine whether the major transport projects in the strategy will still deliver their intended strategic benefits and the Government’s policy objectives, particularly in the context of declining public transport usage, higher levels of home-working and resulting shifts in travel patterns. (Paragraph 10) Levelling up

To allow Parliament and the public to judge the effectiveness of the Government’s infrastructure plans, the Government must publish detailed metrics that define and measure the “levelling up” concept.

We are concerned that the Department did not explain how the construction of major transport infrastructure projects can support the “levelling up” policy agenda. We would be reassured if the Department were to set out a worked example illustrating how investment in major transport infrastructure projects drives growth and productivity. (Paragraph 20) Appraisal

The Government must utilise accurate, sensitive analytical tools to ensure that the projects that best support connectivity, growth and productivity are the ones that get built. In that context, benefit-cost ratios are useful, but they fail to capture regional inequalities and environmental and social factors. The Government must replace benefit-cost ratios with a “benefit-cost plus” system, which not only takes account of costs and benefits and therefore ensures value for money for the taxpayer, but captures regional inequalities and environmental and social factors.

To facilitate transparent, honest and constructive public and political engagement with the economic and engineering realities of delivering major infrastructure projects, the Government should establish floors and ceilings for project costs and timescales defining the range within which projects are scheduled for delivery rather than setting single specific targets, which are invariably unhelpful and inaccurate. Any breach of a project’s cost and/or time ceilings should be communicated to the appropriate Select Committee by a formal mechanism, which should trigger intense parliamentary scrutiny to protect the public purse and to support effective project delivery. (Paragraph 35) 20 Major transport infrastructure projects

Government agencies have repeatedly delivered major transport infrastructure projects that exceeded the specified cost and/or delivery date. Senior management of those Government agencies were apparently unaccountable for such overruns. Senior management of Government agencies with ultimate responsibility for project delivery must be incentivised to avoid cost and/or time overruns. The senior management of Government agencies with responsibility for delivering major infrastructure projects should be subject to a formal duty immediately to notify the relevant Select Committee in cases in which cost and/or time ceilings will be exceeded. (Paragraph 36) Delivery

A discussion paper is an insufficient response to the challenge of ensuring that the UK has the skills to deliver the Government’s ambitious infrastructure agenda. A detailed skills strategy is required. As part of the refresh of the Transport Infrastructure Skills Strategy, the Department must develop a future skills plan in consultation with public and private sector employers to identify and address skills gaps that might delay major projects. Such a strategy should be accompanied by a financial commitment from the Government aimed at addressing specific skills gaps, such as in transport engineering and project management, through apprenticeships and training programmes.

To ensure that the National Infrastructure Strategy supports (a) the “levelling up” agenda, (b) achieving net zero emissions by 2050 and (c) economic recovery after the coronavirus pandemic, the Government must publish by 25 November 2021 a delivery plan setting out how its transport infrastructure commitments will be implemented to support the National Infrastructure Strategy. (Paragraph 53) Major transport infrastructure projects 21