ICE urges Government not to pursue ‘false economy’ of harsh cuts to maintenance

Government must avoid spending cuts that offer short term advantage, but undermine UK infrastructure’s contribution to long term prosperity, productivity and resilience, ICE said in its Spending Review submission.

Jackie Whitelaw
08 September 2015

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It is concerned about how unprotected government departments – many of which are responsible for infrastructure delivery and upkeep - will answer the Chancellor's call to produce plans to save 25% and 40% from their budgets in a bid to find £20bn of public spending savings.

"We would like to see a move towards a ‘whole life’ or ‘total expenditure’ approach to infrastructure investment, covering both capital and maintenance spend over a multi-year basis" - Nick Baveystock, ICE

ICE said the six year £2.3bn investment plan for flood defences should be protected to build the UK’s resilience to flooding and ensure that communities, business, transport networks and power supply do not suffer the same catastrophic.  This echoes calls its President, David Balmforth, made earlier this year. The cost to the economy from the 2013-14 floods was estimated at £1.1bn, with damaging impacts on national productivity.   

ICE also recommended protecting the £15bn investment for the road network, which supports long term growth by enabling access to work, education and the movement of essential goods into and around the UK.

But it stressed that protecting investment for new infrastructure was only part of the solution, and called on Government to ensure the maintenance of existing infrastructure is also factored into spending plans. ICE said a new ‘prevention is better than cure’ approach is needed, breaking away from the false economy of reactive patch-up work.

ICE Director General, Nick Baveystock, said: “Government recognises that robust, effective infrastructure benefits society and the economy - boosting growth, jobs, productivity and resilience.  It also gives us the edge over our international competitors. Government has made solid progress and commitments, and our industry must gear up to respond to the opportunity.

“While Government must make some tough decisions in November, I hope the progress made on infrastructure - and its contribution to the UK’s long term goals - isn’t compromised by the race to clear the deficit. Spending choices should be strategic. 

“As part of this, we would like to see a move towards a ‘whole life’ or ‘total expenditure’ approach to infrastructure investment, covering both capital and maintenance spend over a multi-year basis. Maintenance budgets for local roads and flood defences are not only insufficient, but are allocated annually which means spending is reactive and piecemeal, often failing to tackle the root of the problem.

“If we believe in supporting long term growth and productivity we have to recognise false economies for what they are.  With infrastructure investment, prevention is better than cure.”

ICE said: 

Over the next five years infrastructure policy should focus on two overarching objectives:

• Maximising infrastructure’s contribution to greater prosperity through improved productivity and higher economic growth;
• Building resilience into the UK’s infrastructure networks so that they are able to sustain UK economic growth in the long term.

To achieve these goals the UK needs:

• High performing infrastructure networks and assets to support economic growth;
• A world class engineering workforce that is flexible and can easily be redeployed between projects in the infrastructure pipeline.

ICE will help to achieve these by:

• Highlighting the importance of resilience and a “systems approach” 2 through our policy reports and knowledge outputs;
• Advancing engineers’ technical expertise, business skills, people skills and personal development through the forthcoming ICE Academy;
• Establishing an independent coalition to examine the performance of our infrastructure systems and help to establish what the UK needs from its infrastructure in the longer term.
• To enable delivery of these, Government should prioritise the following in its spending plans for this Parliament:
• Capital programmes in strategic transport and flooding should remain in place. Six year investment programmes in these sectors provide the building blocks for growth, productivity and employment;
• Approaches to maintenance investment should mirror those for capital. A shift to a whole life, or Total Expenditure approach allows for improved performance and reduces the overall cost of maintenance;
• A consistent approach to energy policy incentivises investment, achieves security of supply and allows for affordability. Energy efficiency policy requires attention;
• Apprenticeships which provide recognisable, high quality and transferrable qualifications and incentives to upskill the existing workforce;
• Incentives to promote engineering and science in schools and deliver a knowledge based economy.