London 2050 Infrastructure Plan to embrace “holistic” business case planning

Programmes not projects hold key to delivering the vital infrastructure business cases needed to drive the capital forward.

London Infrastructure Plan 2050 Update

London’s newly updated 2050 Infrastructure Plan will drive a shift in the capital away from planning in silos across transport, housing, energy, water and communication toward a new “holistic” model that better serves the needs of the growing capital.

The updated plan, published  by the Greater London Authority, calls for the creation of infrastructure business cases that are “comprehensive and compelling” to reflect the range of benefits associated with unlocking the full regeneration and economic potential of investment in infrastructure. 

“Clearly those projects which are likely to generate the greatest value for money will need to be prioritised. However, we believe that the way business cases are currently prepared is much too narrow." Londn 2050 Infrastructure Plan

“Right now regeneration areas are absolutely at the bottom of the list in terms of priorities for transport because you prioritise investment where there are congested parts of the network and where people are not able to get onto platforms,” explained deputy mayor for transport Isabel Dedring. 

“So, of course, as a transport agency you would always look at those [congested] areas,” she added emphasising the current challenge. “But if you have a business case for a scheme that is about regeneration or unlocking housing growth that business case will struggle to get through the internal processes of a transport oriented agency – rightly at one level.”

Dedring was speaking at the launch of the new London 2050 Infrastructure Plan during London First’s annual Infrastructure Summit  which also highlighted a £1.9tr economic benefit should London properly embrace investment in infrastructure. 

Overcoming this mis-alignment of business case priorities to find the nirvana of holistic planning, taking into account the needs of all stakeholders, she said, had prompted the creation of a number of cross GLA working groups with developers and with boroughs to try to “stitch together all the different funding sources”.

“Clearly those projects which are likely to generate the greatest value for money will need to be prioritised. However, we believe that the way business cases are currently prepared is much too narrow. This is particularly true for the very large strategic schemes, such as Crossrail 2,” the report adds.

“The current centralised decision-making system for funding was developed in an era in which only modest national budgets were available for managing what was felt to be the inevitable decline of cities. This is no longer fit for purpose in today’s more expansionary city-focused climate, and the appraisal system currently used by the Government stands out as particularly ill-suited to the kinds of large projects that will fundamentally transform the way the economy functions.”

“There is an institutional question about how we engage and pull together so that we can deliver the kind of integrated business cases that we are describing.” Isabel Dedring, London Deputy Mayor

The Northern Line Extension and its impact on the London Riverside development was highlighted as an example of the GLA working to bring together funding and needs from a multitude of different parties to “stitch together” the holistic business case and make the investment possible.

However, Dedring accepted that the challenge today is finding the way within the existing GLA organisation structure and resources to embrace the new challenge.

Initially the plan would be taken forward, she said, on a piecemeal case-by-case basis as GLA sought a more effective mechanism to tackle the complex issues of multiple stakeholder engagement. 

The focus centres on, for example, case studies of development projects at Old Oak Common and Park Royal alongside Crossrail and HS2, Upper Lee Valley and North Bexley plus continued work at Vauxhall Nine Elms Battersea and on programmes such as the £400M plan to target investment in 20 housing zones.

A new interactive map is being launched in June by GLA to help the developers, stakeholders and the public better understand the plans and the potential of current and planned infrastructure projects as a first step toward reorganising the GLA structure to embrace this new holistic planning ambition.

“It is an overcomable problem as a practical matter but the issue is that if you are trying to do that in 30, 40, 50 locations across the city there simply isn’t that resource within the [GLA] organisation,”  Dedring said pointing out that the complex nature of these deals means that they needed a lot of senior time to negotiate.

“So we need to come up with a slightly more institutional solution to the problem that is still a practical solution to the problem,” she explained. “There is an institutional question about how we engage and pull together so that we can deliver the kind of integrated business cases that we are describing.” 

The London 2050 Infrastructure Plan Update

On 30 July 2014, the Mayor published the London Infrastructure Plan 2050 (LIP 2050), a consultation on the future of the city’s growth.

The updated plan published this week set out the issues raised by the consultation but then also tackles delivery across a range of sectors, how we might pay for the plans but then crucially looks at how the plans might actually progress towards reality. 

In his foreword to the report Mayor Boris Johnson sets out his ambition: “We know that well planned infrastructure and housing are innately linked. People must live in areas with running water, energy supply and flood protection. 

He added: “Beyond such basics, they also need excellent transport and digital links to connect them to the rest of the city and the world, and good quality of life. That means investing in the benefits of green infrastructure and reducing demand on our finite resources.” 

Infrastructure delivery areas include transport, green infrastructure, digital connectivity, energy, circular economy, water, housing and social infrastructure

“If London catches a cold then so does the rest of the country and we cannot afford to let that happen,” Sir Edward Lister, London Deputy Mayor

“It should not be seen as a final report, nor as an attempt to summarise London’s total infrastructure requirements over the next 35 years. In reality it merely marks the beginning of a much longer-term process,” explains the plan.

The updated report confirms the aspiration set out in the July consultation report, which highlights that by 2050 London’s infrastructure will include:

  • 1.5M new homes;
  • A 50% increase in public transport capacity, through Tube upgrades and extensions, Crossrail 2, road tunnels and river crossings, and a comprehensive rail network across London with substantial improvements to services in South London;
  • Over 600 schools and colleges;
  • 9,000 additional hectares of accessible green space;
  • A new ‘strategic’ water resource;
  • A sustainable drainage network to complement the current drains and sewers;
  • High-speed digital connectivity;
  • Around 40 facilities for reuse, remanufacturing, recycling and waste management.

Better use of existing assets is also at the heart of the Plan, with measures such as greater use of tunnelling for roads – including the possibility of dual use for storm sewers – extending the use of green roofs, sustainable urban drainage schemes and a raft of technological solutions to ensure that London infrastructure maintenance and operation is future proofed.

Also speaking at the London First Infrastructure summit this week, Sir Edward Lister, London’s deputy Mayor for Planning explained that it was vital for the UK that London continued to invest in its infrastructure.

“If London catches a cold then so does the rest of the country and we cannot afford to let that happen,” he said.

“We have a population growth of 80-100,000 a year and that kind of growth rate will be with us for the next few years,” he added. “We are beginning to get the right funding methods. This plan is not a shopping list it is a series of programmed parts and we have to make each part stack up financially – there has to be a really solid business case for it – Treasury will expect that from us.”

The Plan is clear about the need to move away from the existing silo business case models towards a new era of “holistic” planning to ensure that better cases can be made for both the public and private sector to invest in infrastructure but also that local and business communities are brought into the planning process.

 “It is vital that infrastructure is prioritised and delivered in an inclusive way, with all Londoners benefiting from access to high-quality green space, good transport connections to work and leisure activities, and decent homes sustainably supplied with energy and water – and that all Londoners are included in the digital revolution,” says the report

£1.9 trillion opportunity - London First

According to a new report by business lobby group London first, a £1.9 trillion prize awaits should the capital opt to properly fund and prioritise vital investment in transport, communications, housing, water and power with the UK also benefitting from significant returns to the Treasury.

However, with London’s population set to grow from the current 8.2M to beyind 10M in 20 years,  failure to invest, warns the report, will see the capital become less attractive as a place to visit, live or work, public dissatisfaction increase and international competitiveness is hit.

 “Fulfilling London’s growth potential would bring significant benefits to London and the UK,” says the report. “Illustrative modelling undertaken by KPMG suggests that if infrastructure investment enabled an increase in London’s GVA growth rate from the historic trend of 2.5% to 3.5%, this would yield an additional £1.9 trillion to the economy in present value terms. Of this, around £650 billion would be raised in additional taxation alone.”

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