The ICE has this week called on government to take urgent action to plug Britain’s energy gap and develop an effective planning system.
Speaking at the launch of its annual State of the Nation report, steering group chairman David Orr said energy and planning were the top priorities for the new government.
“Our top line concerns are Britain’s energy gap and in the planning of major projects,” said Orr.
Energy and local transport were awarded a grade “D”, the second-lowest possible score in the report. This indicates that below standard and poorly maintained infrastructure in these sectors could adversely affect the national economy.
Flood risk management and waste and resource management scored a “C” indicating that current infrastructure is at capacity and that significant investment is needed to meet needs in the next five years.
Strategic transport networks and water and wastewater scored a “B” indicating that they are adequate for now, but that investment is still needed to meet needs to 2015.
However, energy infrastructure came in for most criticism, with the report saying the government had take “urgent decisions on nuclear power, renewable energy and carbon capture and storage”.
With 11GW of coal and oil power capacity closing within five years, and a further 7GW of nuclear plant coming offline by 2018, maximum electricity supply was already very close to peak demand, said the report.
The ICE wants government to create an energy delivery plan that sets out clear timelines for government action. It wants the plan to also include a programme of active engagement with asset owners, infrastructure suppliers and fianciers.
Local transport was also slammed: “Local roads are generally in poor condition and are congested in town and city centres.”
“Finding two crucial sectors - energy and local transport - to be ‘at risk’ is very worrying for the nation’s future development and productivity,” said steering group chairman David Orr.
Orr accepted that funds will be limited and said that much of the investment will have to be provided by the private sector.
He called on government to facilitate by giving confidence to investors through clear direction and leadership.
Chief construction adviser Paul Morrell, also speaking at the launch, agreed that balancing public and private investment was one of four major choices ahead.
“It is common ground that there is work to be done bridging the gap between what makes a good business case and what attracts funding.
“And that has bridging has to come from government,” he said.
Morrell and Orr both stressed the key role that Infrastructure UK (IUK) had to play.
It has been tasked with developing a long-term strategy for infrastructure investment and facilitating private sector funding streams.
“It’s all very well us banging on about things like the energy gap, but we need a plan – which is why we so strongly support IUK,” said Orr.
“Let’s face it, if the government works in three year comprehensive spending review cycles, that s no good for infrastructure where it takes 10 years to get from drawing board to minister cutting the tape.”
ICE president Paul Jowitt also stressed the need for long-term planning.
“Infrastructure is vital to our way of life. It is vital to society. It is vital to economic growth in an increasingly competitive world. It is vital to the environment,” he said.
“And it is vital to the very existence of a civilised society.
“We are currently going through a fragile recovery in the aftermath of the global financial crisis.
“So, in these austere times, can we afford the investment in the nation’s essential infrastructure?
“More to the point, can we afford not to?
“The consequences of infrastructure failure – both economically and socially – will be far more costly than making the necessary investment in infrastructure now,” he said.
“Infrastructure lifetimes are 25, 50, or even a 100 years. We are living on these assets now, and now is the time to invest in the infrastructure we need for the future.
“Asset lifetimes of 50 years do not fit easily with electoral and financial cycles of 5-10 years, but we must find a way to reconcile these without cutting vital infrastructure investments.
“Now is the time to do that,” he said.
Morrell agreed with Jowitt, and added that there was a need for more “engineering advice” in government as it makes its “tough choices”.
These include getting the right balance between providing new infrastructure and maintaining the existing, identifying the difference between the obvious investment needs and those – like utilities – that are harder to see, and addressing the low carbon agenda despite fiscal pressures.
“It is no secret that some very tough choices are going to have to be made as we learn to live within our means whilst maintaining both growth and a proper level of public services,” said Morrell.
“One watchword over the coming months is therefore going to be “priorities”.
“The vital importance of physical infrastructure in keeping society energised and on the move, in providing less obvious (but no less important) public utilities, in managing risk, and in supporting economic growth and attracting inward investment is, I believe, fully recognised in government.
“What is more difficult is to identify priorities in a tough spending round. This has to start with engineering, and the State of the Nation series is a hugely valuable contribution to the thinking now required to confirm those priorities, making visible the state of systems that are often too invisible to proclaim their own importance,” he said.
State of the Nation at a glance
The energy sector (graded a ‘D’) gave the most cause for concern, in light of the massive challenges it faces to ensure security of supply in future. In particular the report noted the need to urgently address the lack of spare capacity, with maximum supply currently very close to peak demand. It stressed that Government must make crucial decisions in the next five years on renewable energy sources, nuclear power stations and technologies that can make fossil fuel power generation cleaner, such as carbon capture and storage (CCS), if we are to keep the lights on.
Local transport was also deemed to be ‘at risk’, with far too much dependence on private car travel, and local roads in ‘poor condition’. An increasingly large backlog of maintenance work, worsened by the severe weather this winter, would make any funding cuts disastrous. The report called for local public transport networks to be improved, both in terms of capacity and integration with national networks, to encourage a shift from private cars, and for local roads to be brought up to a satisfactory level through adequate funding and better asset management.
Other sectors in a snapshot:
Water (B): Twenty years of regulatory-driven investment means water infrastructure is generally working well. However, major reductions in demand are needed to bring it into line with long-term carbon emissions goals.
Strategic transport networks (B): Generally good condition however some form of demand management is needed to manage limited road capacity.
Waste (C): Our entire approach to waste must change. The waste industry should be looking to become suppliers – of fuel, compost, manufacturing materials. It is also imperative we reduce the waste going to landfill to avoid infraction fines from the EU.
Flood risk management (C): Current investment in flood risk management must continue however in the long-term our approach must change dramatically.