Now the industry needs reassurance that the May administration will not lose momentum on infrastructure delivery
The resignation last week of infrastructure minister Jim O’Neill from the Treasury came as unwelcome news for the construction industry. The media has read much into his resignation letter, which referred to the completion of a review into “antimicrobial resistance” as the reason for his departure - commentators prefer to highlight his policy differences with Theresa May and the fact that he’s also chosen to give up the Tory party whip and become a crossbench peer, a sign that he may choose to air those differences in future.
A proud Mancunian, O’Neill was known for championing the northern powerhouse idea and for promoting relations with Chinese investors; May, of course, is seen as being lukewarm on both. But whatever the reasons for it, his departure raises doubts about the consistency of infrastructure policy at the top of government.
Just 15 months ago when O’Neill was appointed by George Osborne to the post, the mood was optimistic. At the time Building was quoting industry figures praising Osborne’s forward pipeline of infrastructure projects and predicting that O’Neill would play a pivotal role in delivering them, as the chancellor would be busy renegotiating Britain’s relationship with the EU. How things have changed.
The most obvious problems are energy supply, airport capacity and the road and rail networks
Now the industry needs reassurance that the May administration will not lose momentum on infrastructure delivery. That the UK is well overdue on infrastructure upgrades is beyond doubt. Building highlighted the extent of the problem in its manifesto for construction in the lead-up to the 2015 general election, pointing out that our country ranked a poor 27th in the world for the quality of infrastructure, according to the World Economic Forum.
The most obvious problems are energy supply, airport capacity and the road and rail networks. But there has been some recent progress. The Hinkley review, while it caused a hiatus when it was announced in July, was carried out relatively quickly and resolved to the satisfaction of the nuclear industry. What we need now are decisions on other key infrastructure projects - such as a third runway at Heathrow. These sorts of positive announcements would go a long way to satisfying the construction industry’s hunger for certainty.
But difficult decisions over big, and often unpopular, infrastructure projects will not get any easier if the government does not heed the advice of bodies such as the Airports Commission, or, worse, backtracks on the statutory independence of the National Infrastructure Commission (NIC). The whole point of Sir John Armitt’s original recommendation for an independent body was to go some way to take the politics out of infrastructure, to enable politicians to follow the advice of experts for long-term planning without regard to the short termism of the four-year electoral cycle. The benefit of this long-term approach is it creates a predictable pipeline of work for UK construction, encouraging investment in skills and technology.
The industry, of course, is well versed in this argument, but the hope was that finally it had been accepted at the highest levels of government. The fear now, prompted by the decision not to legislate to put the NIC on a statutory footing, is that the new leadership is not signed up to the same principles. May has proved herself to be the consummate tactician, emerging from the EU referendum unscathed and firmly in control of her parliamentary party - the latter achievement still a distant aspiration for Labour’s re-elected leader.
But what she has yet to prove is where she stands on big infrastructure projects. Is she going to play politics and make each decision on tactical grounds? Or does she feel her power base is secure enough that she can play the long game and put the needs of the country above political pressures? Next week’s Conservative Party conference may offer us some clues; at the very least it would be encouraging if the talk among delegates at construction fringe events was of infrastructure projects in the pipeline rather than infrastructure tsars on their way out.
Chloë McCulloch, managing editor