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Infrastructure delays costing UK economy over £48,000 per minute, claims new report

Cancelled and delayed infrastructure projects are costing the UK economy tens of thousands of pounds every minute, claims a new report from Arcadis.

A mere one-month average delay in the transport infrastructure pipeline will see the UK economy miss out on around £2bn of investment-related GDP over the next five years, equivalent to £48,425 for every minute of delay, says Arcadis. 

The Arcadis Spiralling Cost of Indecision report compares the 2015 and 2016 National Infrastructure Pipeline datasets and calculates estimated costs – such as missed GDP from investment and additional design and build cost – associated with delays and cancellations. It estimates that over the next five years, the cumulative impact of stalling on those projects identified in the 2015-16 pipelines could see the UK economy miss out on up to £35bn of investment-related GDP.

The report also estimates that, as a result of a one month delay, the costs involved in delivering all transport projects in the pipeline would rise by £241m over five years, equivalent to around £8m for every single day of delay. With rail having been identified as the greatest cause of stalled or cancelled transport infrastructure spend, a postponement of just one month could result in as much as an extra £4.2m being added to the total delivery cost of all rail projects for every single day of slippage.  

The report puts some perspective around the challenges the industry is facing, making it imperative that it restructures quickly. It also provides a prompt to the government to clarify its plans and properly back the National Infrastructure Commission in its long-term planning role. Equally, the report sheds some light on why infrastructure projects can appear to overspend.

The National Audit Office has suggested that over a third of major government projects due to be delivered in the next five years are in doubt, and the calculations from Arcadis underscore the scale of lost benefits. 

Chris Pike, Arcadis Infrastructure Client Development Director, commented: “Some of our most ambitious projects, from energy to state-of-the-art transportation, have huge potential to bolster the national economy. With delays being such a recurring issue when it comes to British infrastructure, we are potentially missing out on around £48,000 each and every minute. These are big numbers and we simply can’t afford to delay unnecessarily. 

“Clearly, there are a number of reasons for projects not going ahead on schedule but, all too often, stalling could potentially be avoided or, if the impacts were clearly understood, decisions may be taken differently. It is clear that government needs to send a clear message to the world that Britain is open for business by progressing vital infrastructure projects at the earliest opportunity, without compromising safety or security. Equally, infrastructure owners and industry need to work together to deliver on these commitments, allowing post-Brexit Britain to reap the full benefit, along with the inevitable bounce effect that will result.”

Download the Spiraling Cost of Indecision report here