Decisions, Decisions, Delayed Decisions
It is taking longer for major infrastructure projects to get off the drawing board and into the ground. Between 2012 and 2016, Development Consent Order (DCO) decisions were – with a small number of exceptions – on time or early. The total delay – calculated as the sum of each DCO decision delay within the period, both positive and negative – at the end of 2016 was 509 days. In the following five-year period, timeliness deteriorated considerably with the total delay increasing to almost 4,000 days by the end of 2021.
HM Treasury acknowledges that “the system has slowed in recent years, with the timespan for granting DCOs increasing by 65% between 2012 and 2021.” It has tasked the National Infrastructure Commission with providing recommendations.1
It is no surprise that this issue is already front of mind for many of our leaders, particularly those whose schemes have not yet secured consent and are experiencing the process first-hand.
Events, Dear Boy, Events
Prime Minister Harold Macmillan was referring to the greatest challenge for a statesman. But the same could be said of infrastructure projects, particularly during their consenting stages. The longer the path to securing consent, the more convoluted the path becomes: Policy statements become outdated and regulatory requirements evolve; the stakeholder landscape shifts as other schemes emerge that must be considered; domestic and global economic shocks affect the commercial viability of projects; and the risk of political fettling is amplified by a project’s scale and the length of its decision-making timetable.
Instability is one of the frailties of the planning process. If a change manifests as you’re about to submit something, you have to do the whole thing again.”
MATT PALMER
EXECUTIVE DIRECTOR Lower Thames Crossing – National Highways
All of this can trap projects in a vicious cycle: where delay creates delay, momentum becomes harder to maintain, and supporters start to waver. It is proving more difficult than ever to secure backing for major infrastructure projects and many of our participants are feeling the pain.
To ensure Britain is at the forefront of the clean energy transition, the Government must improve clarity and efficiency in planning and consent.”
GRAEME POWER-HOSKING
PROGRAMME LEAD FUTURE PORT TALBOT Associated British Ports
An Expensive Game
Preparing for a planning examination is becoming more expensive, partly driven by ever-extending timescales. The longer the process takes, the more rework is needed to keep up to date. And the more change, the larger the support teams, and the longer they need to be around.
There is also the ever-present risk of a DCO being rejected or subject to Judicial Review. This creates an unhelpful incentive to spend more than projects might otherwise: with costs for DCOs running into the hundreds of millions of pounds, the affordability of the UK’s consenting regime and whether it delivers value for money is under sharper focus.
The vicious cycle of delay creates a vicious cycle of cost. The longer a scheme takes to secure consent, the more its budget is consumed by the effects of inflation. This forces schemes back to the drawing board, further increasing their timescales. As the cycle continues, the overarching benefits of the infrastructure – its underlying economic, societal, and environmental value – remain trapped on paper.
DOM O'DONNELL
MANAGING DIRECTOR Infrastructure Matters
The escalation of delays in the UK planning system combined with the re-phasing and delay of major flagship projects has pushed the infrastructure sector and all UK major projects into a perfect storm. The current regulatory and political environment is not only pausing the next generation of major projects and costing our country, but seriously damaging the UK’s ability to deliver world-leading projects by driving down confidence, reasons to invest, and reasons for talented next generation of major project leaders to work in UK infrastructure."
Attracting The Best Talent
People deliver projects. But there is growing unease amongst our leaders that the UK’s slow approval regime is harming its ability to attract, develop and retain the talent needed to deliver its most ambitious programmes.
In a time of economic volatility, the need for secure and rewarding employment is elevated. However, early-stage projects rarely provide this security, making them an unattractive prospect for many. Yet it is in the early stages – when strategy is shaped and critical decisions made – that the brightest minds are needed most.
Professional development and growth are also at risk of being adversely impacted. The skills needed to deliver major infrastructure projects are honed through practice and experience. As the UK scales back or defers its infrastructure spending, international markets are heating up. The Kingdom of Saudi Arabia, for example, is expected to spend $7 trillion 1 on capital development this decade. Ambitious and well-funded giga-projects, such as NEOM, hold greater allure to many than a UK redevelopment that may or may not happen. There is a real danger of a generational skills gap emerging in the UK.
The challenge is not about volume but capability, ensuring we have the right people with the right skills"
PHIL WILBRAHAM
NON-EXECUTIVE DIRECTOR Keltbray
UK talent is an attractive import to overseas clients because we genuinely design and deliver really outstanding pieces of infrastructure.”
PROFESSOR SADIE MORGAN OBE
COMMISSIONER National Infrastructure Commission
Backdrop: from Pandemic to Permacrisis
