The Chancellor recently announced £1.3bn for improving Britain’s roads and local transport systems.
Phil Hammond used his first Autumn Statement to show his intentions of channelling funding into the highways sector. His goal being to ease congestion and get an economic bang for his buck. This is very laudable on paper – but how can it possibly work in practice?
The practicalities are that the highways sector has shrunk significantly in recent years.
While billions have been allocated for rail schemes such as Crossrail and High Speed 2, Britain’s network of driving tarmac has been left to develop traffic jams and potholes.
Local authorities warned in October that it would take £12bn and 14 years to bring roads up to scratch – which makes the chancellor’s autumn statement pledge look as significant as a single traffic cone on the M6.
England’s councils are budgeted to spend £4.4bn on ‘highways and transport services’ in 2016/17 – around half what they spent in 2008.
Meanwhile annual spending on major projects on Britain’s motorways and A roads has rarely gone above £1bn in the past 20 years, despite the figure being closer to £2bn in the early 90s.
Yet the Road Investment Strategy outlines plans for £15bn to be spent on 100 capital projects on the strategic network between 2015 and 2020.
With Hammond’s £1.1bn by 2021 to tackle congestion and upgrade roads and transport services, alongside £220m for pinch points on strategic roads, it is clear that ministers want to see a huge acceleration of highways construction work.
Such a step change is never easy but is made more manageable if there is a clear pipeline, and if other infrastructure sectors due to complete major projects and release shovel-ready workers on to the market.
I’m not just referring to the skilled trades people required to carry out the nuts and bolts of a project – critical though these clearly are. But delivering an increased workload in the pioneering, cost-effective, safety-driven way everyone wants to see requires experienced, qualified senior leaders. And they are not easy to come by at the moment.
The roads sector has shrunk and many of the people who were working in roads in the early 90s, when the Stone Roses were in the charts and capital spending was up around the £2bn-per-year mark, have long since moved on.
Tempting people back from other sectors, or from roads schemes abroad – or even drawing in new talent in the same way – takes more than just a speech in Parliament.
These top people require exciting, flagship projects to draw them in, and unfortunately these remain in greater abundance outside, the roads sector. Hinkley Point, High Speed 2 and Heathrow are just three of the glamorous schemes that will be competing with jobs to add lanes to local ring roads.
It’s not as though other sectors are going to become quieter. Crossrail is still underway and High Speed 2 is set to begin construction this Parliament. Hinkley Point has been given the green light, and other nuclear projects are expected to follow. Several airports have spending plans – and Heathrow is set to build a third runway. Water investment is also strong through AMP6.
So what can the government do? Well it can throw silly money at the roads sector, and attract people with massive salary hikes, but this is unthinkable at a time when Highways England has been created to drive value from construction works, and infrastructure spending justification is all about return on investment.
Another option is to use its lack of mega-projects to its advantage by trying to get schemes on site as quickly as possible. Planning systems are never easy to negotiate but it must be easier to get local traffic schemes approved than a new nuclear power station, a runway on the edge of London or a North-to-South railway.
By getting cash out of ministers’ mouths and off graphs in documents into real projects on the ground quickly, the government has a chance to get in ahead of some of the other, potentially stronger, possibly more glamorous sectors.
However, it must be remembered that speed of delivery has not necessarily been a strong point of UK governments when it comes to road spending.
In reality, clients, consultants, contractors and suppliers face an uphill task getting hold of first the money and then – critically – the people to deliver the step change in roads projects that the government is promising.
Perhaps there is a tacit admission of the difficulties the sector faces in the fact that Highways England expects only 40 of the 100 projects outlined in the Roads Investment Strategy to start before the final year of the 2015-2020 period.
Although this might seem to buy the government and the industry time, hoping for 60 project starts in the final year is, to my mind, unrealistic in the extreme.
A more deliverable, believable and beneficial outcome could be reached with better engagement with industry and a more realistic plan. The supply chain can then set about trying to secure the right people to deliver it.
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