There has been plenty of talk about the UK’s planning system, and this will no doubt continue as we reflect on the Autumn Statement, fuelled by the National Infrastructure Commission’s (NIC) recently published assessment, which calls for a significant increase in infrastructure investment across the UK.
Richard Robinson is CEO of AtkinsRéalis UK and Ireland
Quite rightly, the NIC identified an effective planning system as essential if we are to reduce costs and boost investment which – according to their analysis – needs to increase from an average of around £55 billion per year over the last decade to around £70 to £80 billion per year in the 2030s and £60 to £70 billion per year in the 2040s.
The fiscal constraints that continue to challenge this government will most certainly challenge the next, which knows it can’t simply spend its way to growth. As such, productivity gains have never been more important or urgent.
As you might expect, the planning system featured heavily in the Construction Leadership Council’s (CLC) recent productivity report ‘Creating a Productive environment for UK Construction – CLC proposals to close the productivity gap’. It sets out how the construction industry could boost productivity by 25% , generating £45bn of additional added value each year for the UK – equivalent to 2% of UK GDP.
To put it another way, that’s enough money to build more than 220,000 houses a year or pay for two thirds of the UK’s 10-year infrastructure pipeline, including covering the cost of both HS2 and the new nuclear programme.
The analysis, which draws on ONS data and existing industry research, shows that a reformed, digitised planning system – enabled by a revised information management mandate – and better leadership through the Development Consent Order process could save the construction sector, £11.3bn annually.
This is not surprising when you take into account that, since 2012, consenting times for Nationally Significant Infrastructure Projects have increased by 65%, moving from 2.6 to 4.2 years.
Something clearly needs to change.
But, to drive down costs, attract investment and truly transform infrastructure delivery in the UK, a more holistic approach is needed as we look for productivity gains across the public and private sector.
How big is the opportunity?
The CLC’s research identifies around £45bn of annual savings that could be unlocked by making construction a more productive environment, from how we carry out repairs and maintenance, through to the construction of new homes and major infrastructure projects.
For example, £8bn of potential savings could be realised through early-stage collaboration on infrastructure programmes which would see all parties developing and agreeing designs to minimise change and risk further down the line. Sound familiar?
And then there’s a potential £5.4bn of savings to be realised by focussing on multiskilling and retraining our construction workforce, bearing in mind that over 500,000 UK construction workers are expected to retire in the next 10 to 15 years.
Furthermore, around £2.2bn could be saved by helping SMEs become more efficient through the rollout of digital tools to reduce administration time and streamline processes such associated with procurement, tax, apprenticeships and building control.
But delivering this transformative change requires a bold, committed partnership between industry and government who must tackle not just our antiquated planning system but wider productivity pains which continue to hold us back. This is the focus of the CLC and we urge government to join forces in addressing these challenges.
Let’s not waste the opportunity.
- Richard Robinson is CEO of AtkinsRéalis UK and Ireland
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