NNA Submission – Reuby and Stagg
In my opinion the scope of the National Needs Assessment (NNA) and indeed the National Infrastructure Commission (NIC) is too narrow and too elitist. By focusing on projects that are of “national significance” the brief will only consider high profile projects. These projects may realise a specific objective but they often create new problems. This occurs because they are considered in (relative) isolation. HS2 is an example of this; it solves the objective of creating more capacity, but it fails to even ask the question of why these people need to travel from Manchester/Birmingham to London. The same can be said of a wider problem, that of housing capacity. The so-called ‘housing crisis’ is not a single problem and it manifests differently in geographical regions. In the South-East there are, apparently, not enough houses; in the North-East there are plenty of houses but not enough jobs. Looked at in this way it can be seen that it is a distortion in the economy and not merely an infrastructure need.
That is not to say that I am a Luddite; I recognise the need to increase infrastructure capacity. I also understand that the ICE and the NIC are not in the business of ‘social engineering’. My point is just that so called ‘nationally significant’ infrastructure projects do not exist in a vacuum and it is our obligation to society to provide the most efficacious means to solving these problems. Furthermore I would ask why is this Commission not reaching further? The Oxford English Dictionary defines Infrastructure as;
Infrastructure - noun
“the basic physical and organizational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of a society or enterprise.”
The provision of schools, hospital and housing are a vital part of the operation of society and their location and extent is integrally linked to the provision of roads and railways. I appreciate that the current political situation is not in favour of a command economy, nor do I think it either likely or preferable that this state of affairs will arise. However, the location of new schools and housing must be planned with the current and future road network in mind. This is equally true for power supplies and communications. An example of this in my local area is the geographical location of existing schools and new housing developments within the existing road network. There are several roads that are severely congested and a new 1000 unit development will soon be built in close proximity to these roads. The County Council do not plan to provide a new school, as this cannot be justified on the projected number of pupils. Any children in the new housing estate will have to go to one of three nearby schools. To get there they will probably drive and so will add to the congestion. Any adults in the new housing estate will have to go to work and the vast majority will probably travel at the same time in the morning by car on an already congested network.
In the same way that we need to consider the whole rainfall catchment for a flood risk assessment on a river we must consider the volume of flows into the road network. Rather than responding to capacity pressure by new roads or rail networks we should also, therefore, consider how the pressure can be alleviated by other means. The same can be said of a rainfall catchment; by finding ways of holding or diverting rainfall higher up the catchment we can prevent a large volume overwhelming the capacity of the final river. With highway management this could be buses or rail, although people remain resistant to this, or by reducing the amount of distance they travel. These are mainly socio-economic issues but they greatly affect the infrastructure. We shouldn’t be afraid of offering pro-active solutions rather than waiting for a restrictive brief.
It is my view that only by considering infrastructure as a holistic entity can we also resolve the issue of how to pay for it. There is a global shortfall of 1trillion US Dollars in spending for public sector projects. There is not the political will to collect this in taxes so it seems that private finance must fill in the blanks. New schools, roads and healthcare could be provided as part of large scale housing and commercial developments funded by institutional investors. The long-term returns would be paid by ground rent on the housing schemes. The current crop of house-builders and developers could not provide the investment required for projects of this scale, as their delivery model just doesn’t provide this level of funding.
Rohan Malik, head of Ernst & Young’s emerging markets practice, said in an interview with the FT “Pension and private equity funds are saying we have the cash — give us the projects,”…“The question is how do you help governments get projects ready?”
The National Infrastructure Commission is a start, but unless it can provide a credible and sustainable financial and fiscal policy framework for future investment then it will achieve nothing