State of the Nation’s Infrastructure report

The Institution of Civil Engineers’ State of the Nation Infrastructure report was published on 26 June 2014 and was launched at the ICE’s HQ in London, with a high turnout of both Government and industry representatives. Keith Clarke CBE (ICE Vice President for Learned Society) chaired the report’s Steering Group and opened proceedings with an insight into the ICE’s findings and the Group’s recommendations. We were honoured to welcome Lord Heseltine and Lord Adonis to the launch and each provided engaging and insightful speeches (view at www.ice.org.uk/State-of-the-Nation). Both highlighted the importance of timely decision-making in infrastructure delivery and the need to engage and empower local communities in the process.

The report provides an assessment of the condition, capacity and resilience of infrastructure assets, their economic and social benefits, and the effectiveness of governance and leadership of the UK’s economic infrastructure sectors. Using its members throughout the UK, the ICE provides a grade from A (fit for the future) to E (unfit for purpose) to each economic infrastructure sector – energy, strategic transport, local transport, flood management, water and waste. Alongside these grades the ICE offers recommendations, aimed at Government, industry and professional bodies, that the ICE believes will help to improve each sector.

State of the Nation 2014

Infrastructure has shifted up the political agenda significantly since the ICE’s last overall report in 2010. The establishment of Infrastructure UK (IUK), which sits within Her Majesty’s Treasury, and the annual publication of the National Infrastructure Plan (NIP), have altered the way in which Government addresses infrastructure delivery. They have also improved the engagement between Government and industry and, while there is still some way to go, these two groups have a much better understanding of the issues that affect one another when trying to deliver infrastructure.


source: Roger Venables

One area that remains a concern to the ICE is the resilience of infrastructure. The impact of weather events on the UK’s infrastructure networks and the ‘domino’ effect of flooding on transport, energy and water infrastructure are still not taken seriously enough. As we saw in the winter of 2013, extreme, intense and frequent weather events can impact very adversely on our infrastructure networks and create significant disruption. Parts of the country can be isolated due to transportation failures and, while this may be localised, it has a wider economic and social impact for the UK as a whole.

These weather events are not unique incidents. The Met Office reports that since 1990 the UK has experienced eight of the ten warmest years on record and five of the ten wettest years – 2000 and 2012 were the wettest on record. Defra’s Climate Change Risk Assessment tells us that both drought and flooding will seriously impact our infrastructure networks in future years. These challenges require mature debate among Government, industry and academia, and action to adapt to and mitigate their impacts.

This is why the ICE’s State of the Nation report highlighted availability of infrastructure as a key issue going forward. More extreme and frequent weather events will alter the way in which we deliver infrastructure and operate our networks. Government and industry will have to make difficult decisions regarding the level of resilience that we build into our networks against the cost of doing so. We cannot be resilient to everything; therefore, we will have to make choices about the availability of infrastructure services. In 10 years’ time, we may experience the equivalent of snow days and if this is to occur then both Government and infrastructure owners should begin to engage with the public to manage their expectations.

Sector Grades

Sectors under focus

Three sectors came in for specific focus in the ICE’s report – energy, local transport and flood management. Energy was graded as a C-minus, a slight improvement on 2010. This improved grade recognises the enactment of energy legislation that provides the framework to address decarbonisation and security of supply; however, there is still vital secondary legislation required to attract investors into the energy market.

It is perhaps local transport and flood management that are of most concern. These were graded at D-minus and C-minus respectively. Both areas have suffered from significant under-investment in maintenance over the last four years. Maintenance investment in local roads has declined by 11% in real terms from 2010/11 to 2014/15 and maintenance investment in important practices, such as inspection and repair of flood defences, will be as low as £39 million by 2014/15. This decline in maintenance of infrastructure assets is a huge concern to the ICE as the cost of maintaining assets increases significantly the longer preventative maintenance programmes are delayed. As the National Audit Office’s recent inquiry into road maintenance states: ‘there is a narrow time period in which to undertake preventative maintenance if it is to be effective’. This is an area for attention by Government departments and Local Authorities and, as the ICE has quite simply stated: “we should not build new assets if we cannot maintain the ones we already have”.

Influence

The State of the Nation series is produced to influence Government and political decision-makers on all sides. The ICE has been publishing State of the Nation since 2000 and it has become a much anticipated report. It has enabled the ICE to position itself as a key influencer on Government infrastructure policy and we have been able to build a bridge between Government and industry through our work to help deliver the Cost Review.

Perhaps an example of its effectiveness has been the success of the Water Cyclicality group. Since 2006, the ICE has highlighted the unforeseen impacts of the 5-year investment cycle in the water industry. The peaks and troughs in investment have created problems throughout the supply chain and, according to British Water, have led to 40,000 jobs leaving the sector each investment cycle. The work of the Water Cyclicality group, chaired by former ICE President Richard Coackley, has seen Ofwat and water companies work together to bring forward £440 million of investments so that the current investment cycle does not impact on the sector in such a damaging way. This is good progress and we now urge both the regulator and water companies to progress this to smooth out the peaks and troughs further.  

Delivering the recommendations

Throughout the research and drafting stages of the report, the ICE’s Policy and Public Affairs Teams met with Government Departments and politicians to discuss the findings of the report and explain where we would like to see improvements. We will continue to work with all parties to achieve progress in these areas, both through adoption in party manifestos and the policies that are implemented by the next administration.

We are in the unique position of knowing exactly when the General Election is, so the ICE’s influencing work is aimed towards the 7th May 2015 when the nation will decide its next Government. The key issue for the ICE is that the long-term importance of infrastructure remains within politicians’ minds. Now that we are seeing a small return to economic growth, focus could quickly shift to other issues; however, it is important that we emphasise the continued need for political and regulatory stability to attract investment into infrastructure.


For further information please contact Andrew Wescott, Head of Policy,
Institution of Civil Engineers
(0207 665 2311; E-mail:
andrew.wescott@ice.org.uk).

 

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