Ahead of the General Election, members of the Civil Engineering Contractors Association (CECA) called for the new Government to move quickly, to provide clarity and confidence to industry about the policies that it would implement. 

CECA is the trade body representing the bulk of those companies that build and maintain the UK’s public infrastructure. We strongly welcomed indications from over the first 100 days of the new administration that it plans to hit the ground running, having already set out its missions, and later, an ambitious programme of legislation in the Kings Speech. 

While the new direction in policy will have some impacts on our sector, we also welcome clarity on the challenges that the new Government will face in terms of public spending. As a trade body representing the infrastructure sector, we want to support the Government, particularly regarding its central missions of delivering economic growth and establishing Great British Energy to transform the energy of tomorrow. 

As such, we are championing a number of recommendations as to how we can work together to support the new Government to deliver its objectives. We know that there is a £22 billion blackhole in public finances. So we are not asking for more money. Our recommendations are fiscally neutral, with no additional funding requirements. 

Firstly, we advocate for long-term certainty to drive growth and efficiency. Across utilities, highways and rail, we have seen that public and regulated infrastructure owners have been able to secure continuous improvements in the efficiency of asset construction and maintenance. Multi-year funding settlements allow such organisations to plan smoother investment and unlock major supply chain efficiencies that are not available  with stop-start funding. 

However, these benefits have not historically been available for local authorities.  CECA recommends that the Government move to extend similar visibility of funding for councils, helping them to deliver better outcomes within existing budgets, driving growth to benefit communities and businesses across the UK. Furthermore, we suggest that the Government moves away from asking local authorities to bid for funding pots. This approach tends to be inefficient and sustains a short-termist approach to delivery over strategic decision making.

While challenging spending decisions are expected, we also urge that existing funding settlements are not unpicked, and that Network Rail, National Highways, HS2, Transport for London and other strategically important transport bodies are provided with certainty about their future spending limits. Doing so not only locks in the supply chain efficiency benefits that arise from certainty, but is also crucial to attract wider private sector investment and developers, extending the reach of public investment.

Ahead of the election CECA was among a wide range of organisations that called for a long-term strategy for transport infrastructure. We believe that through the Autumn Budget and subsequent Spending Review, the Government can help build the foundations of such a strategy. We look forward to working with the new National Infrastructure and Service Transformation Authority to drive delivery of the strategy, delivering better outcomes for all.

Secondly, we must find a way to enhance productivity through better skills delivery. The UK faces an enduring issue to meet the resource needs of a growing infrastructure programme. Industry is working collaboratively to respond to this, increasing the provision of new entrant training and upskilling across the country. 

Our aim is that no person in the UK is more than 1 hour away from the training they need to be employed delivering the infrastructure that will drive growth. However we can do this most effectively where there is strong co-ordination between all parties. We would ask the Government to work with us as part of a new UK infrastructure skills partnership, better harnessing existing resources, and bringing all players together to meet this future skills challenge. 

Thirdly, it’s all about the money. We have noted discussion ahead of the Autumn Budget about the potential role that private finance may pay in delivering future UK infrastructure.
We know that broadly half of the new infrastructure built in the UK is already privately financed, particularly in the utilities sector. However, we understand that there remains a perception issue where private finance is leveraged to tackle projects that would previously have been publicly funded. 

Given the constraints on public funding, the UK may need to use private finance to meet the gap between our national need and the Exchequer’s ability to immediately pay. 
However we believe that this will only have the public consent if there is a better understanding of the true benefits and costs of the use of private finance, avoiding any suggestion that it is a way of hiding costs from the public. 

We would further welcome exploration of options to make the public direct beneficiaries of such private finance, building on existing work to harness the value of UK pension funds for investment, while also considering options for those with savings to have a direct stake in privately funded projects. 

Finally, we think that there is a sensible discussion to be had about how to better unlock infrastructure investment where doing so makes significant housing development more viable. We would like to work with Government and others to better capture the value uplift associated, helping to deliver ambitions targets on new home construction. 

Our members recognise the enormous opportunity that exists for UK businesses to support the Government’s mission to become a clean energy superpower. Across the UK we are tracking projects that could delivery well in excess of 100GW of new electricity generation capacity, as well as hydrogen infrastructure and transmission & distribution projects.
However this proliferation presents its own challenges, as industry must try to identify which of these projects are most likely to proceed.

To help with this, we are developing a clean energy project pipeline. We would welcome the opportunity to work with Government to leverage this pipeline, using it to help support businesses to deliver the skills needed for construction, while also guiding on investment in technology and R&D to meet the requirements of such work. 

Such a pipeline, published in partnership between industry and Government, could help benefit businesses across the whole of the UK, driving growth and unlocking clean power. It will also help provide clarity for downstream users, highlighting expected future infrastructure availability to unlock wider investment that relies on low carbon energy. 

I will be discussing these ideas and many more on the first day of UK Construction week. Only by working together can we deliver the infrastructure needed to support a twenty first century society. See you there!

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Author: 

Marie-Claude Hemming

Director of Operations, Civil Engineering Contractors Association