General Election won’t stop infrastructure programme, Deighton says.

Next year’s General Election will not lead to a hiatus in infrastructure investment or focus attention away from using the sector as a means of growing the economy, commercial secretary to the Treasury Lord Deighton said last week (view Lord Deighton's keynote presentation to last week's ACE conference above).

Local council and European election results have demonstrated the potential upheaval that can be caused by voters but in terms of the argument in favour of infrastructure Lord Deighton said that “the Autumn Statement will continue to fill out the capital programme for the next seven years and it will be tough to change course.

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“If things are going well, politicians tend to leave them alone and take the credit.”

Lord Deighton's comments came as he delivered the keynote address to the ACE Annual Conference  “Integrating infrastructure, shaping our future” in London last week.

He agreed with ACE chief executive Nelson Ogunshakin who said during the introduction “that the challenge of accepting the importance of infrastructure is won, now it is about how we deliver.”

“I have been in government for 17 months and the Chancellor asked me because he wanted to make sure government could be as proactive as it could be in getting infrastructure built,” Lord Deighton said.

He is using his experience as chief executive of London 2012 organisation Locog to instill the discipline of meeting targets in terms of budget and time learned during his Olympic experience. “For the Olympics there was a relentless focus on making sure we met budget and delivery targets; the question was always ‘do you want to be the person who prevented it?’ We are trying to use that, recreate that feel of knowing Her Majesty the Queen was going to be parachuting in at 9pm on 27 July.”

Success demands absolute clarity of what we are trying to accomplish, he said. The economy is now growing but ensuring that growth is focused not on consumption but investment is where infrastructure fits in.

He listed four areas of interventions that government needs to make to guarantee that happens.

1.     Government needs to own the plan.

“Since the first iteration of the National Infrastructure Plan in 2010 it has evolved and we now try to run it much more as a programme with a series of deliverables,” Deighton explained. “In the next one I expect there to be a clearer iteration of the science infrastructure we need. This is not always associated with core infrastructure but it gives potential competitive advantage to the UK and it is crucial. Also it will be the perfect place to achieve the next phase of the communications strategy – fibrelay of 100% from street cabinet to home. The next plan will also address harder problems like synergies across sectors –the road strategy properly co-ordinated with the ports strategy for example; when work is underway what can be done for other infrastructure at the same time; and plans for long term resilience.


2.     Government needs to make sure the money is there.  

“The common view is that the principle constraint is money. That is not true. We are much shorter of investible projects than capital to finance them. Funders say there is no asset they would rather own than one in the UK offering inflation adjusted, long, reliable returns. For those sectors financed by taxpayers in June 2013 we laid out our capital programme to 2021. The vast majority is underway and of all the changes coming up, the six year budget for the Highways Agency is going to be transformational. The question we will be asking ourselves is why didn’t we do it earlier.”

Vitally important going ahead, Lord Deighton said, is to be “extremely careful of protecting the independence of regulators”. Their freedom to get the balance right between pricing and capital programme attracts capital and is a “sweet way” of dong things. “This is a precious thing which can be lost in a heartbeat.”


3.     Government has to own planning reform.  

“The one simple message we need to get across is that we need a ‘yes’ or a ‘no’ as fast as possible. Planning is the part of the infrastructure cycle where we are less competitive. We spend too much money and time on it. On the Olympics we did in seven years what it would normally take 30 to do and yet there were no rare species lost. We are happy with the regime, we just need to streamline it.”


4.     Government needs to make sure its own capability (central and local) is sharply delivery focused.

“We are going in the right direction but the particular challenge ahead is that we are going to have to show the public we are succeeding ….and demonstrate against the plan that stuff is happening all the time; projects are starting, projects are finishing. We are moving into a phase where we will find that much easier.”

It is not a question of going faster, Lord Deighton said, but being on schedule. “It is better to establish a realistic programme against which progress can be measured.

“We are showing great delivery on the big projects. HS2, London Tideway, London Bridge Station, Crossrail continuing to deliver, the Highways Agency’s massive programme coming up – these are the kinds of things to maintain momentum. Our job now is increase the momentum but continue at a rate that is sustainable.”

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