The Institute for Government think tank says the Government must “up its game” in terms of private finance if it is to secure investment at a good price. It must also learn from past projects and improve its approach to accounting, appraisal and budgeting to pick the best finance options for schemes.

 

Other recommendations for Government include creating a Commission for Public Engagement to better involve local communities in major projects, giving the National Infrastructure Commission greater independence and developing an infrastructure strategy for the whole country.

 

At an event to launch the report in London yesterday, the Institute’s associate director Nick Davies said the UK needs greater infrastructure investment but added that schemes “often end up costing more than they should”.

 

There is currently, he added, a “bias towards private finance” along with “incentives to use private finance”, even where it does not represent long term value for money.

 

The Government must, therefore, “publish comparisons between different finance options” for individual projects. It must also “get better at collecting, collating and analysing data on private finance deals” as there is little evidence about the whole life cost of private versus publicly financed projects.

 

Nick Davies also said that mega projects over £1Bn tend to run over their allotted time and cost, so Government must look to try and overcome its “optimism bias”.

 

On the subject of public engagement, he said that too often the Government approach is to streamline the consultation process. “But if communities don’t feel they have a genuine say in projects they often oppose them entirely, resulting in delays costing millions of pounds.”

 

Other countries take a more structured approach to conflict resolution, he continued, “which can be beneficial for Government and communities alike”. He cited a French national commission for public debate which, despite having no formal powers, can help communities have their say and make changes to projects.

 

Responding to the report, the Transport Select Committee’s chair Lilian Greenwood said she particularly welcomed the call for greater public engagement in major infrastructure decisions such as High Speed 2. Politicians, city leaders and businesses may understand the reasons for the scheme, but she remains unconvinced that the public does too.

 

“I’m not sure we have really won the argument about the wider benefits with the public, who stand to gain from a rebalancing of the economy and better national connectivity,” she said. “This is really important as people need to understand and value the scheme, particularly when we are spending large amounts of public money.”  

 

The Institute for Government also calls for the role of the National Infrastructure Commission to be strengthened; becoming an executive non departmental public body. Nick Davies added: “The first proper test of the Commission’s effectiveness will be the response to the publication of first National Infrastructure Assessment due out this summer.”

 

The report adds that the Government should establish a National Infrastructure Strategy to co-ordinate infrastructure policy. Such a strategy should “clearly explain how accepted recommendations from the National Infrastructure Assessment interact with existing plans like the Industry Strategy and national policy statements to achieve Government’s infrastructure objectives”.

 

But, Nick Davies went on, there are eight Government departments and 26 Ministers with official responsibility for infrastructure policy, plus Combined Authorities, local authorities, Local Enterprise Partnerships and, starting in April, sub national transport bodies. “This requires co-ordination that is currently lacking,” he noted.

 

“There needs to be a clear framework for prioritising projects and co-ordinating work; which is particularly important for large national projects like High Speed 2.”