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Lighthouse | Engineers must clarify infrastructure uncertainties

As we start the year, it is important to reaffirm that infrastructure transforms lives by connecting people, unlocking human potential and raising living standards.

Too often in debates on infrastructure investment, we forget these fundamental tenets.

However, despite the payback from infrastructure investment, agreeing such investment is still a bet on the future which carries risk. These bets can also preclude others being made, either on other projects or elsewhere in the economy.

This gives rise to a persistent challenge: despite infrastructure being the bedrock of our social and economic fabric, investment comes with substantial risks that politicians need to be able to stomach. At the best of times, this is a difficult pitch to sell. 2019 will be even more difficult than usual.

The year will be full of major political decision points at the UK level. The UK’s exit from the European Union (EU), a spending review, a Queen’s Speech, a Budget and maybe even a General Election.

The renewal of the Democratic Unionist Party’s support for the minority Conservative government will also need to take place and the Scottish Government will need to find allies to pass its Budget in February.

As the second half of 2018 showed, no one can say with any certainty how the year will play out.

But some things will have to take place. Top of the list will be the UK Government’s spending review, expected after the UK formally leaves the EU, which is currently scheduled for the end of March.

The government has already declared the “end of austerity” and announced funding in major areas, such as health spending in England. From a revenue spending point of view, this means decisions on the major shifts in budgets have effectively already been made.

This is not so for capital investment. While capital spending has increased during the period of austerity, the UK government announced at Budget 2018 that the spending review would include a “zero-based review of capital spending”. It is not yet clear if this will treat social and economic infrastructure as separate or as one and the same, as in Scotland.

Such a review would bring into play questions concerning major projects, such as how to fund elements of the Road Investment Strategy in the absence of PFI, High Speed 2 Phase 2 and Northern Powerhouse Rail. These questions could rub up against capital investment for say, a major publicly funded housebuilding programme.

This continued uncertainty once again underscores the focus of the ICE’s 2018 State of the Nation, which looked at alternative financing arrangements (such as a pay-as-you-go system for strategic roads in England and Scotland) to get around these medium-term political cycles and deliver the infrastructure the public needs.

The spending review is just part of the din through which the case for infrastructure will need to be put. As 2019 progresses, we will be redoubling our efforts to remind politicians across the UK of the transformative effects of infrastructure. Rather than a risky bet, it is a down payment on a prosperous future – whatever that future looks like.

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