This year promises to be a hugely significant one for civil engineering. But will the promises turn into reality? New Civil Engineer asks the experts.
Late last year, the government made clear its intention to encourage spending on infrastructure.
Announcements about Hinkley Point C and Heathrow boosted confidence and then, through the Autumn Statement and the associated National Infrastructure and Construction Pipeline, the government demonstrated its intention to invest in infrastructure in the name of economic growth. But what comes next?
The next six months are of great importance as the reborn National Infrastructure Commission builds up its picture of the UK’s infrastructure needs before publishing its National Infrastructure Assessment in summer 2017. It will be hugely influential in determining where government prioritises its future spending.
So what does the short term future hold? The week before Christmas New Civil Engineer convened a think tank of industry clients, decision makers and leaders to assess the state of the market, comment on the industry’s readiness to capitalise on the opportunities, and identify the steps needed to ensure the industry is ready and able to deliver.
No longer a pipe dream
Crucially, the National Infrastructure and Construction Pipeline is no longer a wish list – and does not include projects that “don’t exist”, or do not have some form of government or other approval and funding commitment. So stressed Keith Waller, as senior advisor to the Treasury’s Infrastructure and Projects Authority (IPA). “For example, the pipeline doesn’t include South East airports capacity or Crossrail 2 as these projects haven’t got full funding or the go-ahead,” he explained.
This is significant, said Waller, as it allows the industry to do some long-term skills planning with confidence.
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“We can now do long term planning with an element of certainty and confidence behind it because we are assured there is a long term programme of future investment ahead of us,” he said.
Waller stressed that focus – and skills – on maintaining and renewing existing assets must also be retained.
“Infrastructure is not only new projects,” he said. “Ninety five percent of the assets we are going to need in 20 years’ time are here already. We need to keep that focus on the performance of the current asset base as well as how we deliver new assets more effectively.”
The UK currently spends 0.8% of GDP on infrastructure investment, and the government is looking to spend between 1% to 1.2% of GDP on economic infrastructure between 2020 and 2050.
This also brings assurances, said Waller. “We are not sprinting to a cliff edge; it [current infrastructure spending] is part of a sustained growing long-term investment programme. The challenge with that level of investment and longevity is how do we make sure we are delivering things better, but better things as well?
“We want to deliver much better outcomes with 1% to 1.2%, then that should allow us to invest more in more projects. It’s the dream to not spend 1% to 1.2%, but to deliver better outcomes, and that requires us to think in a bit more connected way about how we get there,” he adds.
Embracing technology to allow innovation
To fill the skills gap, Heathrow director Ian Ballentine said the industry must build up its entire offering. “We need to bolster all the elements far more,” he said. “The whole people focus, the whole IT focus, these peripheral aspects. We focus on the tasks and ultimately the outcome and should put far more effort into how we create the structure to get the people working.”
Tideway strategic projects director Phil Stride agreed and added that the industry needed to be sold to potential employees in the terms that young people understand.
“Technology is changing and useful to efficiently deliver infrastructure in the new world,” he said, “but the other side of the coin is that technology is changing, and the young people living in this age are changing with it. The threat is, if we don’t embrace technology for the efficiency side, we also don’t have the bit that helps sell this exciting world we work in.”
Highways England technology programmes director Richard Moir added there was no need to panic about technology.
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“The technology we use now, we would have never envisaged 10 years ago, but we put the infrastructure in place,” he said. “We need to think about how we build the big infrastructure that people can hook on to, to give efficiencies or drive new technology. We can’t second guess what the new technology is going to be, but we can put the infrastructure in place to allow it to happen.
“We shouldn’t try and boil the ocean and second guess what the new technology is going to be, because that will come out of people trying to be more efficient,” he added.
Waller also urged the industry to get better at sharing good practice across the industry. “I guess we could be 30% more efficient in how we deliver infrastructure if we don’t do anything new, but just deploy existing best practice more consistently and more widely. We just need to have a better platform to share best practice, rather than every project, every client and every supplier inventing their own innovation.”
UK Power Networks director of capital programmes and procurement Nirmal Kotecha agreed. “It’s the better use of space capacity and using technology to identify that,” he said. “It expands your thinking of what the shared economy could do for the construction industry, and it’s phenomenal.”
On innovation, “we want to be a fast second,” added Kotecha. “We will not be the leading edge of technology.”
Waller agreed with the massive potential of the shared economy. “One of the challenges is that we invest in things that have a direct benefit to ourselves. The shared economy of the digital transformation enables a wider blend of who benefits. Not just the private sector, but to the wider economy. The potential is massive.”
Transforming the shape of the industry
Kotecha said the industry should challenge itself and “destroy its business model in terms of how it currently generates revenue”.
“We need to flush out waste, as opposed to thinking ‘it is in my interest to leave this spare capacity lying idle as the client is going to pay for it’,” he said. “This should be offered as value to the client.”
“There is something about the infrastructure business that is not driven by efficiency,” added Ballentine. “The way it achieves efficiency is de-scoping, and creating a lesser scheme to cut costs.
Messages to the industry
“We need to know who is up for really making change happen in the industry. It needs clients and contractors coming together. But it will be painful.”
Nirmal Kotecha UK Power Networks
“The focus needs to be on improving the benefits to citizens and end users of infrastructure which requires us to think of whole life performance of assets, not just the construction.”
Keith Waller IPA
“Clients need to take ownership of driving innovation through the supply chain and not just talking about it and waiting for it to happen.”
Ian Ballentine Heathrow
“With the devolution agenda, we need to get the devolved authorities linked up with shared goals. By collaborating with the likes of Highways England there is a huge amount of potential.”
Jason Pavey Atkins
“We need to properly connect what we do more closely to the point of what we do.”
Richard Shennan Mott MacDonald
“The industry needs to be better at analysing what we value and what are successful outcomes, and communicating it and recognising and aligning people’s thinking.”
Keith Bowers London Underground
“We need a new approach to assessing cost benefit ratios for major projects as it always comes out bad. We need to think about how the government can better enable clients to make the case for infrastructure.”
Tim Smart HS2 Ltd
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“We need to take a look at the maturity of the client and the sponsor, and get both of those to look at managing their asset base better.”
Hannah Vickers Infrastructure Projects Authority
“In devolved powers, we need strong and mature local leadership to bring coalition partnerships together.”
Andrew Striven MWH
“We ought to focus on early and repeated wins to evolve our infrastructure, and encourage what we don’t know by encouraging people to use that infrastructure properly.”
Richard Moir Highways England
“Working together is easy to say, but harder to do and even harder to make successful for everyone involved. It requires new ways of working.”
Phil Stride Tideway
Think tank members
Ian Ballentine executive procurement director, Heathrow
Keith Bowers head of tunnels, London Underground
Mark Hansford editor, New Civil Engineer
Nirmal Kotecha director of capital programmes and procurement, UK Power Networks
Richard Moir technology programmes director, Highways England
Jason Pavey market director local transport, Atkins
Richard Shennan group practice manager buildings, Mott MacDonald
Tim Smart project engineering director, HS2 Ltd
Andrew Striven technical director programme management, MWH
Phil Stride strategic projects director, Tideway
Hannah Vickers head of project initiation routemap infrastructure performance, Infrastructure Projects Authority
Keith Waller senior advisor, Infrastructure Projects Authority
Alexandra Wynne deputy editor, New Civil Engineer