As clear as mud

Beales: "Long or medium-term certainty is needed so we can provide the infrastructure with real value for money"

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If the government wants a more effective construction industry, then it must be more transparent about its infrastructure plans Rosemary Beales believes.

It is hard to think of an area of life which remains untouched by the advances of human ingenuity. Technology makes life easier, medicine helps us live longer, science makes us safer and communications opens new worlds of understanding. Yet, in the same way that a cure for the common cold eludes us, some problems that appear straightforward stubbornly deny all attempts to overcome them. One of these problems is achieving medium or long-term certainty in investment in infrastructure.

If infrastructure lacks investment, and it is showing the strain in many instances, both the economy and the quality of life will suffer. It is not just transport either. The floods of summer 2007 were an illustration of the damage caused by inadequate infrastructure and one of the main recommendations of the recent Pitt Review was the creation of a long-term investment strategy for flood management. Look at energy.

The lights may not be going out now, but it's a dark future for us unless we look beyond the next two years and wake up to the fact that demand will outstrip our capacity to generate power by 2016. Our approach is more make do and mend than invest to meet demand.
It is straightforward: the construction industry cannot operate at full capacity if it does not know what is around the corner. A visible plan for a programme of works, where the funding has already been set aside will aid decisions on recruitment, investment, the procurement of finance and capacity.

Civils contractors compete to provide the same service whether that be the construction of a wind farm, a costal defence or a new railway line. The contractor chosen through the tender process will construct the same end product as an unsuccessful bidder would have done. Driven by client specifications, it is a high risk market with low profit margins. A struggling contractor cannot just increase output levels – it is constrained by the needs and requirements of the client and in the case of infrastructure, more often than not, that client is Government.

In such a competitive market contractors have to manage their own workloads efficiently and profitably and this is best achieved by aligning skills and expertise with clients' future priorities. This is impossible if there is no transparent strategy and ultimately it is the client who will have to pick up the tab. Contracts are apt to change once the main contractor has been selected but the additional cost this incurs is minimised if the contractor is given sufficient time to plan ahead. Long or medium-term certainty is needed so we can provide the infrastructure that underpins wealth creation and quality of life with real value for money.

Recently, a favoured response to the charge of inefficiency in the way that Government invests in infrastructure has been to suggest that industry should become more efficient and make savings. Contractors have more than risen to this challenge but at the same time, why should they, and the tax-paying public continue to be let down by Government and its lack of vision? Certainty over investment and more focused procurement procedures would enable the whole of the supply chain to work in a more integrated way, innovate and enable the use of their valuable resource, people, most effectively. 

This is not asking the impossible. The devolved administrations of Scotland and Wales have used decentralised powers over their infrastructure and taken steps to give contractors greater certainty. We now know more about the investment intentions of the Scottish and Welsh Governments in transport than we do about England, despite the existence of the Department for Transport and the Highways Agency!

You may have heard all this before but it is a central point in the debate about how the country can achieve sustainable economic growth and maintain its quality of life. The infrastructure we are talking about plays a major role in both of those factors – in fact it is considered so critical by the Government that it has established the Centre for the Protection of National Infrastructure, the sole purpose of which is to reduce the vulnerability of our national infrastructure to terrorist and similar attack. So Government recognises the importance of our infrastructure but seems not to recognise the need to plan for its future development. With our industry potentially viewed as a "vested interest" we need to mobilise other parts of industry and public opinion to reinforce our message.

Interestingly it has been another industry sector that has, perhaps, opened up a chink in the Government's armour. One of the main recommendations of the recent Pitt Review was the creation of a long-term investment strategy for flood management. It might draw a long intake of breath from contractors, in the sense of an opportunity missed, to learn that Pitt compared the idea with the long-dead Ten Year Plan for Transport. Finally, now, in one area of infrastructure, we are to have a 25 year investment plan. There is also hope in the National Policy Statements for major infrastructure that are proposed as part of the current Planning Bill. The Government may, at long last, be waking up to the debate.

Rosemary Beales is CECA's national director