The Long Game

Nick Baveystock, director-general of the Institution of Civil Engineers (ICE), tells Paul Jarvis about the importance of long-term thinking and raising skill levels across the infrastructure industry ahead of the government’s Spending Review

How are you finding working with the new government and what work have you been doing to educate new ministers on the role of infrastructure?
ICE established a strong relationship with the coalition government, and over the past few months we have been building on that relationship, and the progress made on infrastructure over the last five years. It is clear to us that the new government recognises that robust, effective infrastructure systems benefit society and the economy – boosting growth, jobs, productivity and resilience. It has made solid progress and commitments, and our industry must gear up to respond to the opportunity.

We work closely with all government departments, and all other political parties, to provide independent, expert advice on infrastructure. ICE also has a strong regional network which is well positioned to help shape and implement devolution and realise the Northern Powerhouse vision.

We have been working particularly closely with the energy department, DECC, on the issue of electricity storage – it is on the verge of being technologically and economically do-able. The energy trilemma (affordability, security and decarbonisation) is one of the biggest challenges we face and it is right that we help government turn solutions like this with potential, into reality. We have a report coming out in October.

What are your thoughts on the Summer Budget as an indication of the government’s direction of travel?
It was a positive and reassuring Budget. The government reaffirmed its commitment to a number of policies and initiatives, and its plans to invest £100bn in infrastructure over the next five years. Our industry thrives on continuity and the government’s first Budget was exactly the right time to demonstrate this.

The Chancellor also stressed the need for government to be bold in its commitment to infrastructure if the UK is to achieve a rebalanced economy, increase productivity and maintain our competitive edge. He is absolutely right and I hope this also translates into bold decisions on aviation capacity, resilience and our future energy mix.

And what are your thoughts on the government’s plans to change the road funding system?
We are at a critical point ‒ the scale of the UK’s needs is large and growing yet public finances remain tight. Government must therefore be innovative in identifying funding streams for infrastructure. Plans to part fund a second Road Investment Strategy (covering 2020-25) with revenue from a restructure of Vehicle Excise Duty are welcome and I hope this proves fruitful.

We would like to see a similar long-term, innovative approach when it comes to funding our local road network. After all, our journeys generally begin or end on a local road so this network plays an equally vital role in delivering better national connectivity, growth and productivity. Continued deterioration in the condition and performance of local roads will limit its ability to deliver these benefits for the UK.

What are your thoughts on the government’s productivity plan? And what is ICE doing to help the industry contribute to greater productivity?
Productivity within the construction sector is poor; this is a global issue but an acute challenge in the UK. The government has set out a sound approach to improving this, with infrastructure – a catalyst for boosting growth, skills and innovation – rightly placed at its heart.

In order to maximise infrastructure’s contribution to greater productivity, we will need to see a shift in approach – from both government and industry.

The government must create a stable policymaking environment to help incentivise long-term investment in infrastructure, it must improve departmental capacity to plan investments and better manage the delivery of infrastructure projects. And it must take steps to ensure we have a pipeline of engineering talent who can deliver a range of world class infrastructure projects into the future.

This starts in the classroom. We need more physics teachers in schools so all children have the opportunity to take science, technology, engineering and mathematics (STEM) subjects. Ofsted must rigorously inspect schools’ careers guidance so the range of modern STEM paths available, including vocational and technician roles, are communicated to students. And the government’s commitment to create three million apprenticeships by 2020, while welcome, must focus on high quality schemes that result in real jobs on successful completion.

Industry must also step up to the challenge – upskilling the current workforce so it is flexible, can easily be redeployed between projects in the pipeline and is trained to use the technologies of tomorrow as well as today.

Encouraging and embracing innovation, making better use of technology and digitisation, and finding ways to deliver more with less, are key.

ICE is currently developing an Academy, which will be the focal point for providing ‘whole life’ learning. The ICE Academy aims to upskill the existing workforce and those who have taken career breaks by providing topical learning content structured around four key knowledge areas. It will off er a growing range of mid-career qualifications to help our members maintain relevance in the market.

We have also launched an “Industry Transformation” campaign to enable a more agile, innovative sector ready to embrace change – for example one that is “BIM ready”, on top of new methods and processes and how they can improve delivery.

What are your hopes for the upcoming Spending Review?
The government can support industry’s transformation by taking a strategic view when it comes to making decisions on spending come November. This ultimately means avoiding cuts that offer short-term advantage, but undermine UK infrastructure’s contribution to long-term prosperity, productivity and resilience. Some solid progress has been made on infrastructure, and we hope it isn’t compromised by the race to clear the deficit.

We believe the six-year £2.3bn investment plan for flood defences should be protected to build the UK’s resilience to flooding and ensure that communities, business, transport networks and power supply do not suffer the same catastrophic effects again. The cost to the economy from the 2013-14 floods was estimated at £1.1bn, with damaging impacts on national productivity. The £15bn investment for the road network should also be protected: our roads support long-term growth by enabling access to work, education and the movement of essential goods into and around the UK.

But protecting investment for new infrastructure is only part of the solution. The government must ensure the maintenance of existing infrastructure is also factored into spending plans. A new ‘prevention is better than cure’ approach is needed.

As part of this, we would like to see a move towards a ‘whole life’ or ‘total expenditure’ approach to infrastructure investment, covering both capital and maintenance spend over a multiyear basis. Maintenance budgets for local roads and flood defences are not only insufficient, but are allocated annually which means spending is reactive and piecemeal, often failing to tackle the root of the problem. If we believe in supporting long-term growth and productivity, we have to recognise false economies for what they are.

ICE was a strong supporter of the idea of an Infrastructure Commission, as promoted by Labour peer Lord Adonis before the General Election. Can this concept still be realised and what are your hopes for it?
The mismatch between the long-term nature of strategic infrastructure planning and short-term political cycles has been acknowledged by politicians of all sides, and we need to find a way to deal with the negative consequences.

ICE supported the idea of some form of independent body for infrastructure, and the National Infrastructure Commission was one of the well-argued proposals on the table. But ICE’s hope was to strengthen the remit of Treasury body Infrastructure UK, to build on the structure in place and progress made, instead of creating a completely new entity.

Our focus is still geared towards building on the progress made, and helping political parties build consensus on the UK’s infrastructure needs. But what has become clear to us, is that we need a much better understanding of what those needs actually are, taking into consideration a number of future uncertainties, from economic change through to global energy prices and climate change.

ICE is establishing a coalition of the willing – including representatives from across industry, business, academia and opinion formers – to examine the current performance of our infrastructure systems and establish what the UK will need from its infrastructure in the longer term.