Infrastructure delivers growth
Mark Coates FCInstCES FCIHT, Vice President of Infrastructure Policy Advancement, Bentley Systems
BRITAIN’S new Prime Minister has set five long-term missions for the nation with the central mission being a pledge to secure the highest sustained growth in the G71. If the new government is serious about delivering long-term sustained economic growth, then it must look to invest more in Britain’s aging infrastructure.
Building infrastructure goes beyond laying a piece of road or a railway track. It is a pathway to economic and societal growth – a highway to a higher quality of life for people and greater productivity for British businesses. Infrastructure stimulates supply and demand. When investments are made in energy, telecommunications, and transport networks, direct impacts can be seen in the production of goods and services.
Further, infrastructure can reduce the cost of delivered goods, facilitate the physical mobility of people and products, remove productivity constraints and increase the UK’s competitiveness in comparison to neighbouring countries.
With this in mind, it is encouraging to read the contents of the independent rail and urban transport review2 in August which was led by Juergen Maier CBE and the former CEO of Siemens UK with support from Arup and the Urban Transport Group. The review was established in December 2023 by the Labour Party while in opposition.
This independent review calls for a long-term vision and ambition for transport infrastructure which aims to decarbonise transport by increasing the use of rail freight, increase walking and cycling by 2035 and to double the number of rail passenger journeys within a decade.
This independent review calls for a long-term vision and ambition for transport infrastructure which aims to decarbonise transport by increasing the use of rail freight, increase walking and cycling by 2035 and to double the number of rail passenger journeys within a decade. This final target is ambitious.
The last time the UK doubled rail patronage according to Office of Road and Rail estimates, was between 1999 to 2000 and 2019 to 2020 when annual passenger rail journeys almost doubled from 900 million to 1.7 billion journeys. To help deliver this, the review calls for a clear, long-term national transport strategy aligned with the UK’s industrial strategy and housing delivery. It also wants the UK to maximise infrastructure spend by proposing a ‘greener, faster, cheaper’ framework.
The approach, developed by Arup, sets a target for reducing the cost of project delivery by 20% and to deliver them 25% faster. Resetting how Britain delivers infrastructure is hugely important given the huge cost increases experienced by HS2.
The review also calls for the need to deliver more Public-Private Partnerships (PPPs) to secure more private infrastructure investment with the creation of a new infrastructure investment playbook to facilitate PPPs and supported by HM Treasury. With this in mind, it is understandable why the new government has cancelled some infrastructure projects such as the A303 Stonehenge tunnel, the A27 Arundel bypass, and the Restoring Your Railway programme.
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Given the previous UK government cancelled the eastern leg of HS2 to Leeds, the western leg of HS2 to Manchester and severely downgraded Northern Powerhouse Rail, it is important for the British public and infrastructure investors to know that the new government wants to reset what infrastructure it wants to deliver and how it wants to deliver it.
As part of this reset it is heartening to see the new government’s plan to reform infrastructure delivery and deliver a longterm infrastructure strategy by launching the National Infrastructure and Service Transformation Authority (NISTA).
It is heartening to see the new government’s plan to reform infrastructure delivery and deliver a long-term infrastructure strategy.
The aim of NISTA is a welcoming vision: To drive more effective delivery of infrastructure across the country and support the delivery of a 10-year infrastructure strategy3.
It is a merger of two previous government agencies – The National Infrastructure Commission (NIC) and The Infrastructure and Projects Authority (IPA) – making it a more powerful body to ‘better support the delivery of major capital projects’.
NISTA’s creation is a result of Labour’s Major Capital Projects Review, launched by the new Chief Secretary of the Treasury, Darren Jones MP, and chaired by Juergen Maier.
It is jointly accountable to the Treasury and the Cabinet Office, and the new Labour government says NISTA will focus on tackling the inertia at the heart of government to get Britain building again and will be given new powers and an updated mandate to drive more effective delivery of major projects and infrastructure across the country.
Part of the reason to reform the UK’s planning system through the National Planning Policy Framework is to make it easier to build laboratories, gigafactories, data centres, electricity grid connections and more. Yet, while there is high interest in increasing infrastructure investment, in recent years we have continued to see opportunities denied.
For example, Deputy Prime Minister, Angela Rayner stepped in to review two significant data centre projects – a £2.5bn, 700,000ft2 project known as Court Lane Industrial Estate and a large-scale £1bn, 900,000ft2 data centre facility on green belt land near Abbots Langley, in Hertfordshire – both rejected by councils.
We must implore our government officials to make investments that will create both near-term jobs, while looking ahead to improvements in quality of life, population welfare and general productivity.Delivering proposals for reform of the National Planning Policy Framework, a King’s Speech laden with 39 bills and setting a date for an early budget in just two months’ time, demonstrates a government determined to move swiftly and decisively to unlock growth. It is encouraging.
Sir John Armitt, chair of the National Infrastructure Commission, said: “Closing the infrastructure gap between what the UK has and what we need is a long, hard task. The new government has shown impressive pace and determination over the last week to get going on that task. Early announcements on planning reform, devolution to local leaders and the creation of a national wealth fund are welcome statements of intent. Putting economic growth at the heart of decision making in relation to these will unlock projects that will make a difference both locally and nationally’.
While it’s inherently understandable for governments to put funding where it’s easier to spend, rather than where it’s difficult but more needed – we must act to change that mindset. We must implore our government officials to make investments that will create both near-term jobs, while looking ahead to improvements in quality of life, population welfare and general productivity.
Major societal benefits can be achieved by cutting 15 minutes off from workers’ commutes, making roads easier to drive on, easing public transportation networks for bus, rail, plane as well as more sustainable road options for bicycle commuting. Productivity has long been one of the nation’s most difficult nettles to grasp, and the benefits of a workforce that knows it’ll be able to get to cities on time and comfortably and with an ability to work on the move via public transport is powerful. While not easy to measure, it is anecdotally obvious to see.
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Analysis of Transport for the North’s preferred Northern Powerhouse Rail network by Mott MacDonald shows that just by delivering the Manchester, Bradford and Leeds connection of Northern Powerhouse Rail will deliver a £22bn economic boost to GVA.
The King’s Speech included a highspeed rail bill. And while it won’t bring back the cancelled sections of HS2, it does include opportunities to build a new rail infrastructure in the north, including a pledge to build a new station at Manchester Piccadilly.
This is nothing less than a positive move, as Manchester leaders, including Greater Manchester Mayor Andy Burnham, have been fighting for an underground station to connect Piccadilly for years via the Northern Powerhouse Rail.
There is evidence to back up the benefits of investing in high-speed rail. A 2021 study from the University of Birmingham suggested that cities with high-speed rail stations have a 22% higher population growth rate than cities without. For example, in Japan, the Tohoku high-speed rail line has enabled population growth increases of 32% in cities close to high-speed rail stations, whereas the remaining areas have shown no significant population growth.
The study also noted that properties within 0.25 miles of a highspeed rail station were priced 12.2% ahead of those further away, and that development of business areas and office space near or connected to a high-speed rail station increased job opportunities significantly.
Britain’s historically high national debt should not be seen as a reason not to invest more in UK infrastructure. There are multiple cases where debt and investment are not seen as linear decisionmakers.
For example, the US has higher levels of national debt as a percentage of GDP, but this has not stopped leaders from announcing major levels of spending on infrastructure. Four bills announced by President Joe Biden – including the Inflation Reduction Act (IRA), Creating Helpful Incentives to Produce Semiconductors (CHIPS), and The American Rescue Plan – delivered US$1.1tr of spending on energy and infrastructure, with most of it coming from the bipartisan infrastructure law. Analysis shows that the IRA alone generated nearly US$100bn in new investment and over 80,000 jobs – in both red and blue states – in 2023.
If Britain is serious about its growth projections – it must seek to stimulate economic activity by investing in infrastructure that will deliver greater productivity and prosperity for its businesses and citizens.Looking at Japan, it is recognised for having the highest percentage of national debt in the world, at 259.43% of its annual GDP. At the time a national debt of more than 200% of GDP did not stop Japanese government leaders from approving the extension of the bullet train line in 2012, which included the construction of six new stations built as part of the 125km Hokuriku Shinkansen extension which opened in 2024.
If Britain is serious about its growth projections – it must seek to stimulate economic activity by investing in infrastructure that will deliver greater productivity and prosperity for its businesses and citizens. To achieve this, I echo the findings of Juergen Maier’s independent rail and urban transport review which includes pressing ahead to deliver Northern Powerhouse Rail in full – connecting the great cities of the North from Liverpool to Hull and Newcastle via, Manchester, Leeds, Bradford and Sheffield.
Analysis of Transport for the North’s preferred Northern Powerhouse Rail network by Mott MacDonald shows that just by delivering the Manchester, Bradford and Leeds connection of Northern Powerhouse Rail will deliver a £22bn economic boost to GVA (Gross Value Added) by 2060, £16.5 billion of which will come from increased productivity and £5.5bn of which will come from increased employment.
Infrastructure investment like this not only increases productivity and employment but it also provides an opportunity to deliver major city centre regeneration, which will enable globally recognised cities in the north of England to achieve heightened economic and social impacts. This will enable Britain to deliver and sustain higher levels of economic and societal growth and prosperity for longer.
Mark Coates FCInstCES FCIHT, Vice President of Infrastructure Policy Advancement
Bentley Systems
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3 See https://www.gov.uk/government/publications/fixing-the-foundations-public-spending-audit-2024-25