Construction and infrastructure: the road ahead

  • BSA staff
  • 20 May 2015
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Now that the dust has settled on the general election, the Prime Minister and his Conservative government must look forward to the task ahead. Having settled down at their desks, ministers will see that a number of crucial construction and infrastructure decisions await their attention. Some projects are already well on the way to completion, such as Crossrail. Other well know ventures, such as High Speed 2, still have some way to go before ground is broken on construction.

The formation of a Conservative majority government means the party manifesto acts as a useful guide to the construction and infrastructure policies we can expect in the years ahead. Perhaps the most imminent infrastructure related event on the horizon is the report due from the Airports Commission on runway capacity in the South East. For nearly three years Sir Howard Davies and his team have examined the various options available and gradually whittled them down to just three. Next month their long awaited recommendation will be announced and with it, all eyes will turn to government for a response.

If the government does decide to press ahead with expansion at either Heathrow or Gatwick, it will be the first new runway at a major airport in the South East for decades. A decision for expansion, at whichever site, will undoubtedly see independent providers play a key role in the delivery of a flagship infrastructure project. Road improvements, railway upgrades, increased cargo capacity and the runway itself will all be required in a UK airports project of unprecedented scale.

Another major project on the horizon, which has proved no less politically controversial, is High Speed 2.The hotly debated railway project will see London connected with first Birmingham and then Leeds and Manchester by record speeds. The HS2 Hybrid Bill still has a number of parliamentary hurdles to overcome before it is approved, however it does theoretically enjoy the support of both the Conservative and Labour party leaderships. As one of the biggest railway projects since the Victorian era, High Speed 2 will likely see a key role for independent providers in laying the hundreds of miles of track required.

Whilst airports expansion and High Speed 2 are perhaps the most headline grabbing of the new government’s construction and infrastructure challenges, there are plenty of other areas that will require due care and attention. Another major rail project which could enter the pipeline is Crossrail 2, which the Conservative manifesto pledged to push forward with. Elsewhere, the newly installed Energy Secretary Amber Rudd has already signalled her intention to implement the Conservative manifesto of ending subsidies for new onshore wind farms. As well as this the manifesto pledged an additional £15bn of funding for road improvements, with £6bn earmarked for the North of England.

Finally, it would be remiss not to mention the Chancellor’s recent announcements on further plans for the devolution of powers to northern cities. The powers mooted could include significant control over local infrastructure, particularly in transport, shifting power away from Whitehall. The extent of fiscal devolution on offer remains to be seen, however the appointment of former Goldman Sachs economist Jim O’Neill to oversee the project is aimed at demonstrating the government’s commitment.

The new government’s infrastructure plans will become more apparent over the coming weeks and months, however it is clear that there are decisions to be made on major projects that will have a lasting impact. The BSA welcomed the National Infrastructure Plan for providing a clear and coherent framework of the government’s intentions. The BSA hopes that whatever decisions the government chooses to make on the key construction and infrastructure questions, they stick with them and provide the sector with the stability it needs.

  Related topics: Procurement, Public service reform, Economy and growth