Sun, 19 May 2024

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By Lord Watson of Wyre Forest
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The winner of the next election must deal with the costs of botched and delayed projects

4 min read

For the past twelve years I have questioned senior civil servants directly accountable to Parliament for spending taxpayers’ money. Much of that time has been examining projects gone awry and vast sums of taxpayers’ money wasted.

But there is also a category I call the Big Nasties – decisions delayed and investment in buildings and big infrastructure neglected. As we contemplate a general election, regardless of how the votes stack up, these deferred projects will be expensive additional cost for an incoming government.

There has recently been a focus on the nuclear enterprise, the programme which covers all defence nuclear projects. While this has been looking forward to the 2030s, look back and we see costly neglect. Our first nuclear submarines came out of commission in 1980 and yet not one has ever been decommissioned. This means there are critical issues of space in our dockyards for ongoing maintenance of the existing fleet. The first is due to be decommissioned by 2026 at a cost of £96m (in 2018 prices). So there is a cost of doing the work, but there is likely to be an even higher cost in further delays.

Look at capital infrastructure more widely; we have 700,000 pupils in schools which are inadequate. The Department for Education wanted to replace these at a rate of

200 schools a year and bid for £4bn. It received £1.3bn.

Many of our hospitals are reaching the end of their useful life. These include the seven entirely reinforced autoclaved aerated concrete (RAAC) hospitals which, along with other NHS buildings where RAAC has been found, are being funded with £685m just to monitor and prevent catastrophic collapse. These will no longer be safe to use after 2030 and yet the PAC has highlighted that the hospital capital programme is behind schedule with huge risks as the promised new hospitals (32 not the 40 that were promised) are being delayed.

After decades of underinvestment the animal health centre in Weybridge requires investment of £2.8bn. It is the only centre in the UK equipped to deal with certain zoonotic diseases (those that start in animals but put humans at risk).

The examples above will require key skills to deliver. This adds to the delay in delivering these projects. The PAC has repeatedly highlighted ongoing skills gaps which put major projects at risk.

Last year the government launched a combined civil and defence nuclear skills programme, but we are short of digital specialists, construction skills and specialist engineers. As infrastructure projects are planned, we need to plan for the skills needed to deliver them. Without this the big nasties will take even longer, and be more expensive, to deliver.

Some of the major challenges facing Britain require long-term investment and planning. As well as infrastructure, these include how to accommodate our ageing and growing population, how to marshal the potential of digital technology for the public good, how to tackle man-made climate change, and how to sustain an effective defence capability.

As well as the challenges of specific projects, we need better mechanisms for allocative efficiency – so governments spend money where it makes the most difference. Spending on public health to save money on acute healthcare is one example.

As governments grapple with today’s crisis and tomorrow’s challenge there is often too little thought given to whether what is actually being delivered is working.

Slow politics requires long-term perspectives beyond one Parliament. With money tight, it can be tempting to focus on the immediate, but there also needs to be a long-term focus. Most large infrastructure and defence programmes fall into this category. Digital transformation in government is also an area which needs consistent funding and is at risk of departmental budget cuts if there is no clear plan to protect it.

Government needs to think long term and, manifestos notwithstanding, be clear about decisions delayed as well as decisions made and what that costs the taxpayer. A penny of waste is a penny stolen from the citizen. At our peril do we forget that.

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