Last Thursday afternoon I was being driven back to the Department for Transport (DfT), I remarked that we were living in " the new Victorian era." This was only half-jokingly. I was on the back from seeing the Crossrail works at Paddington. In the previous week, I had attended the start of works dualling the A11 at Thetford, the announcement of Phase 2 of HS2 in Birmingham, and the work to build Britain's new port, DPWorld. All huge infrastructure projects but indicative of UK in 2012, where there are a large number projects at the consultation, the design or the build phase. The 2011 National Infrastructure Plan set out 500 hundred projects that the Government wants to see built over the next decade and beyond, including 40 priority projects overseen by a Cabinet Committee.
This represents a complete change from the UK's historic reaction to infrastructure during economic downturns in most of the 20th century. The usual policy decision is to cut off capital spending with the consequence that long term growth prospects are lowered and maintenance is in backlog. This shift represents a change of understanding about the role of transport as an enabler of growth – improved connectivity drives growth. A further consequence is a change of view and the recognition that the Department of Transport has to be a key economic ministry.
This Spending Review committed £30bn for road, rail and local transport infrastructure improvements across the country, and the 2011 and 2012 Autumn Statements added further monies to this. And of course, in July 2012, the Government announced £9bn of investment in the High Level Output statement. This funding will support and deliver our current projects despite challenging financial markets. The medium term challenge is to ensure efficient funding of investment, using both public and private sector sources. So government needs to ensure that the ramifications of risk and long term revenue streams are properly understood. However, in the post financial crisis era which we are entering, there are international sovereign wealth funds, venture capital/private equity and UK pension funds, all with money to invest. The challenge is now for government to bring forward projects and create innovative funding mechanisms which allow that private sector money to flow into national infrastructure.
The Government announced the new National Planning Policy Framework, simplified planning laws and introduced a presumption in favour of sustainable development. This is a useful and innovative start to removing one of the barriers to infrastructure projects. However it is only a start, we need to press on with defining National Significant Infrastructure Projects and truncating consultation and design timescales. This remains a challenge for government; the shorter the pre-build period, the sooner the projects will open.
A strong and stable economy is essential. Without it, there is no growth, no rise in living standards and no improvement in services. The key ingredient of securing that strong and stable economy is investing in our transport and our infrastructure.