Government’s infrastructure decision making – wasting time and money?

A new Institute for Government (IfG) report, What’s wrong with infrastructure decision making? has highlighted a number of weaknesses in the way that government makes infrastructure decisions that may lead to wasted time and money.

While major infrastructure projects are widely known to support successful economic growth, decisions around infrastructure planning and development should not be taken lightly says the report. Nick Davies, IfG research manager and co-author of the report said: "Britain desperately needs upgrades to its infrastructure. But too often projects are given the green-light based on questionable assumptions, a lack of strategy and without learning from past mistakes. Government decision making must improve significantly if we want to reap the benefit of smart infrastructure investment.”

The UK government is planning to spend £245bn over the next five years on economic infrastructure projects - energy, transport, utilities and digital communication. The underlying question raised throughout the report is whether or not the government is able to identify the best investments to make in infrastructure, balancing the realistic benefits and costs.

Much of the £245bn will be up-front capital, which cannot be recouped even if the project fails. Therefore if these large-scale investment decisions are made poorly, future prosperity can be stagnated while the UK is locked into inappropriate infrastructure projects. 

This challenge has been realised and acted upon by successive governments, who have tried to reform the policymaking process through depoliticisation, new planning or delivery agencies. Yet, the current processes still have many weaknesses says the IfG’s report.

Six key weaknesses found in UK infrastructure decision making are:

1. No national strategy for infrastructure investment;
2. Lack of government attention given to assess early options;
3. Ambitious forecasts based on questionable models; 
4. Failure of government officials to understand project risk;
5. Difficult decisions create ‘concentrated losers’;
6. Inadequate evaluations miss improvement opportunities.

Click here to download the full report.