With the exception no doubt of economists, anyone who has ever worked in the business of economic appraisal will recognise the truth in this week’s comments by Sir John Armitt about the limited value of this process when it comes to the promotion of major projects.
While it is perhaps unfair to suggest that many appraisals are reverse engineered from the desired solution, it often feels like that is the case - not least, of course, to those who don’t share a passion for the proposed scheme.
The problem, however, is that we find ourselves, for many good and proper reasons, locked into a democratic and accountable world, which demands that robust economic proof is ahead of any decision.
Oh for the efficiency of benign dictatorships! Have an idea. Sell that idea with passion. Get on with it and reap the benefits as quickly as possible. That of course is effectively what happened during the Victorian era, which was largely free of economic appraisal and planning scrutiny. As Armitt points out, get the “why” right and the “what” and the “how” quickly follow. The likes of Brunel, Stephenson and Bazalgette did just that and we are still reaping the economic benefits.
Of course it is important that, when public money is involved, proper checks and balances are put in place to ensure that investment in infrastructure delivers good value for every pound spent. But history shows that reliance on cost benefit ratios alone is not the best way to judge long-term project value.
For all the detailed assessment of reduced travel times, lower accident rates, increased business efficiency and even job creation caused by infrastructure investment, it is hard to quantify and assign a meaningful value to all of the wider and longer social benefits.
Which is why the driver for successful infrastructure projects must come from passionate advocates rather than spreadsheets. Sadly we still see too many of the latter and too few of the former. This failure is highlighted by Isabel Dedring, London’s deputy mayor for transport, who this week draws attention to the difficulty of getting medium-sized projects off the ground compared those of mega-scale.
The problem, she points out, is one of political support. No matter how attractive the business cases, multiple advocates for multiple schemes usually results in nothing happening. Transport for London is attempting to focus attention on a small number of key schemes. Likewise the UK government has assembled its targeted wish list in the shape of the National Infrastructure Plan.
And that is a positive step towards improving society and boosting the local and national economies with modern infrastructure. But as long as we continue to substitute genuine political advocacy with largely meaningless economic assessment we will continue to see costly delays to our infrastructure delivery.
Spreadsheets are wonderful things. But give me a quick and passionately supported decision any day of the week.
- Antony Oliver is NCE’s editor