Making the economic case for major infrastructure is fruitless and can be no substitute for “visionary” political backing, the boss of the London 2012 Games delivery said last week.
Olympic Delivery Authority chairman Sir John Armitt rubbished economists’ efforts to produce a financial argument for such schemes, stating that “none of them stand up”.
“I believe economists are capable of delivering any answer the government wants – frankly I don’t believe any of it,” he said, adding: “When you look at these analyses, none of them stand up.”
Armitt was speaking alongside former transport secretary Lord Adonis, Treasury body Infrastructure UK chief executive Geoffrey Spence and architect Foster + Partners partner Huw Thomas at an event organised by Westbourne Communications in London last week.
Armitt said that what was vital to the success of projects was politicians who can “sell the vision”, as exemplified in the past by two extremes of the political spectrum, former Tory deputy prime minister Michael Heseltine and former Labour London mayor Ken Livingstone.
They “had the political gumption” required, he said, adding that, unfortunately, “there aren’t very many [others] like them”.
Armitt said that to get major projects off the ground three main concepts need to be addressed – why, what and how.
“You need the why debate to get a project off the ground,” he said. “Until you have the why debate, you can’t move on to the what and the how.”
Despite working within a Treasury agency, Spence agreed that there was too much emphasis on the pre-emptive economic debate surrounding infrastructure, stating that benefit to cost ratios were “almost universally low or negative”. “But then you turn the question around,” he added. “Ask would you want to live without High Speed 1 or Crossrail? Then it becomes an intuitive response.”
Adonis also placed emphasis on politics and the importance of gaining at least a degree of political cross party consensus for the principle of developing any infrastructure project.
“Big infrastructure simply won’t happen unless you get a minimum of cross-party consensus first,” he said.
But rather than relying simply on the ability of politicians to stimulate the progress of infrastructure, Adonis said that business could make or break infrastructure projects.
“Crossrail would be dead but for its very strong business support,” he said, illustrating his point by the fact that in this instance business “invented” its own pressure group in the form of London First, to “agitate for London’s infrastructure”.
The subsequent plan for business to pay supplementary rates, which he said was voluntary, “made it almost impossible for Treasury to cancel it”.
This point was echoed last week by speakers at NCE’s London Rail conference. Referring to the around £500M contribution from business to the £14.8bn Crossrail scheme, Transport for London head of strategy Geoff Hobbs said that relatively “small amounts” of private investment are more significant for their ability to “raise enthusiasm out of proportion”.
The flip side – little political support and opinions divided in business – can be seen in the way the debate on airport expansion has stalled.
“Airports aren’t happening because there is no sponsoring minister,” said Adonis. “[Such development] needs a project champion.”
He added that he regretted backing a third runway at Heathrow before the last election, partly because of the limited support. “Crucially business was divided, so it got caught up politically,” he said.
“A number of business leaders came out against it, even though they mostly didn’t believe what they were saying,” said Adonis.“What I should have done was not take a decision [on a third runway] before the election at all.”
He added that he imagined he could have gained “tacit consent” of the two main parties after the election, which would have meant “we would now be agreeing on Heathrow”.
High Speed 2: too fast or too slow?
The speakers clashed over the speed at which infrastructure is delivered in the UK, in particular on the £32.7bn High Speed 2 (HS2) project.
“The speed at which HS2 is being developed is lamentable,” said Olympic Delivery Authority chairman Sir John Armitt, adding that it was “absolutely appalling” and demonstrated “a lack of ambition”.
Foster & Partners partner Huw Thomas said: “It only took us twice as long [compared to the plan to build HS2] to build the rail network.”
However, Infrastructure UK chief executive Geoffrey Spence feared that the scheme was being progressed “too fast to ensure the costs are at the right level”.