Cross party consensus on the development and implementation of infrastructure projects remains crucial says ACE in its election manifesto due to be released tomorrow.

Any future government must work across party political lines “to provide industry with the certainty it needs to invest in our future”, according to the Association for Consultancy and Engineering’s (ACE) in its new election manifesto.

With six months to go before the UK General Election ACE has set out its desire to see the next government embrace long term infrastructure investment planning and sets out recommendations which it describes as “practical, pragmatic and achievable”.

“Without this commitment the UK will struggle to maintain its current economic position in the world with a corresponding impact on living standards.”

“Although we have achieved a lot there is still more to do. As a country we need to develop a greater cross party consensus on the development and implementation of large scale infrastructure projects,” says ACE chief executive Nelson Ogunshakin in his introduction to the manifesto.

“More needs to be done to link societal needs with government delivery within national and regional frameworks,” he adds. “We also need to unlock the huge potential of our cities to grow their economies and meet their residents’ needs and create social value.”

The manifesto focuses on seven key areas of policy which require “the committed support of the UK government to meet the challenges the country faces”. 

These critical areas are Transport, Utilities, Housing, Finance, Procurement, Sustainability and Skills. For each the ACE manifesto sets out a list of recommendations which, it says, all political parties should work together to support and embrace.

“Our members, however, cannot solve these problems alone as they will need the committed support of the UK government to meet the challenges the country faces,” says the manifesto. “Without this commitment the UK will struggle to maintain its current economic position in the world with a corresponding impact on living standards.”

Transport - £112bn transport investment identified in the National Infrastructure Plan 

To deliver transport for a growing economy government should:

“The last five years have seen transport firmly recognised as a key economic driver. We must make sure we build on this foundation and ensure the UK’s transport networks continue to be fit for a twenty-first century purpose. The UK has to deliver a true vision as to what its transport system should look like in 25 years.”

• Continue its roads reforms – commit to providing the Highways Agency with a fixed revenue stream in the form of Vehicle Excise Duties to give the same security of funding Network Rail enjoys through the track access charge regime.
• Commit to Crossrail 2 
• Begin preparatory work on HS2 Phase 2 & HS3 –
• Give the regions more say over infrastructure investment – The UK’s core city-regions must be empowered through increased control of locally raised taxation to invest in the transport infrastructure they feel they need to thrive. 
• Decide quickly on Davies Commission recommendations for airport hub development.

Utilities -£240bn utility investment required. £8,847 investment per household

To deliver utilities for a growing economy government should:

“The decisions we make today will determine the sustainability, connectivity and operability of future generations. Government needs a balance of new technologies and reliable, well-understood infrastructure to ensure it delivers a cost effective solution for the future."

• Improve transparency and competition –explore models such as ACE’s Priority Auction Mechanism (PAM) which aims to improve pricing and transparency.
• Secure energy supplies as this is now critical - create a number of Generation Investment Vehicles (GIVs) to complement the Electricity Market Reforms.
• Recognise that connecting the UK is about more than utilities – The UK should aim to have 50% of all broadband connections at 100mbs by 2020, rising to 90% by 2025 and accelerate the development of 5G technology.
• Smooth and co-ordinate investment – With an increased emphasis being put on Regulated Asset Base (RAB) models of investment
• Empower consumers to manage demand.

Housing - the UK must build 886,000 houses if current demand projections are to be met 

To enable future generations to own their own homes the government should:

“Successive UK governments have been notoriously bad at delivering on the house-building targets they have set during their times in office. Rather than making announcements that they will build a certain number of homes, government should focus on providing an environment conducive to new development coming forward.”

• Implement the ACE’s LOVE model – The ‘Land Optimisation Value Extraction’ model will ensure all parties involved in developing land for housing are able to share in the uplift, thus incentivising development. 
• Provide guarantees in the event of a fall in land values.
• Empower Local Authorities – Local Authorities should be required to produce strategic plans for the provision of the housing that will be required in their areas in the medium and long-term. 
• Make it easier for small developers 
• Create stability in social housing policy - ACE’s housing models suggests a flat 15% provision of social housing within a development with an option to purchase up to 15% extra.

Finance - $24.6tr value of funded pensions market. £375bn NIP pipeline investment requirement

To unlock private finance the government should:

“The UK over the next ten years needs to continue to emphasise the importance of investment as a driver for economic growth. To optimise this growth, however, the UK needs to ensure that private companies and investors are able to make decisions efficiently.”

• Create funding certainty – the government should extend the six year funding profiles for government departments to 10 years.
• Improve policy certainty 
• Improve regulatory consistency.
• Recognise that alternative finance is a long game – Pension funds may help to invest in infrastructure in the future but the need for structural and cultural change is significant. 
• Devolving investment opportunities –Models such as Tax Increment Financing (TIFs) and PF2 allow such solutions and could be effective tools to leverage the investment the UK requires.

Procurement - £230bn spent annually on procurement. UK construction is worth £100bn

To ensure strategic investment through procurement the government should:

“There will need to be efforts to raise the capacity and capability of infrastructure and construction clients across the wider public sector to a consistent level of excellence in order to secure whole life value for money.”

• View procurement as an investment mechanism – Encouraging all public sector construction client organisations to view procurement as an important element of investment in supporting regeneration, growth at national, regional and local level.
• Endorse the critical role of the construction/infrastructure client.
• Encourage wider public sector to adopt initiatives to secure whole life value for money and supply chain efficiency and innovation.
• Utilise progress to date in the future.
• Encourage a collaborative debate on procurement reform between the public sector and industry.

Sustainability - the UK must reduce its emissions by 80%. The UK emitted 569M tonnes of carbon dioxide in 2013

To ensure future growth is sustainable as well as economically beneficial the government should:

“The next government will have an opportunity to demonstrate that jobs, growth, and efficiency can go hand in hand with decarbonisation and high environmental standards. A green growth policy will also support the UK’s environmental sector, which already turns over more than £100bn a year and has strong export potential.”

• Implement fully the recommendations from the Infrastructure Carbon Review.
• Ensure that any new runway capacity aligns with long term emission obligations 
• New energy generation must enable ongoing decarbonisation - a 2030 energy decarbonisation target should be set in line with advice from the Climate Change Committee
• Reduce construction side emissions 
• Brownfield land remains an underutilised resource – the cost of preparing such land for development could be met by capturing the land value uplift that occurs as development takes place.

Skills - The UK faces a shortfall of 36,800 qualified engineers by 2050

To ensure the UK has the engineering skills it needs the government has to:

“Ensuring education and training programmes are well-funded, rigorous, valued, and up to date will provide the confidence employers need that they are delivering the knowledge and skills required.”

• Improve careers advice to ensure that it  is appropriate, well-informed and widely available, setting out the various career paths open to them including apprenticeships.
• Increase incentives for STEM teachers 
• Reach out to a wider audience –government should develop plans to boost the diversity of engineering undergraduates and apprentices. 
• Provide more support for apprentices.
• Ensure viability of HE programmes – The government should commit to a review of funding arrangements for engineering degree courses.