UK Infrastructure spending: How can we prove the benefits in the long term?

Infrastructure is critical to our economic growth. With the UK Government committing record levels of money to infrastructure spending and an expanded pipeline of projects worth more than £500 billion, the need to identify and manage long term benefits, right now, has never been more important.

UK Infrastructure Benefits Management

Many of the biggest infrastructure benefits, like HS2's contribution to the Northern Powerhouse, will only be seen long after the project is actually delivered. This means that, even as costs come under increasing scrutiny, demonstrating future benefits resulting from major infrastructure schemes like the Lower Thames Crossing, HS2, or the Thames Tideway is essential. 

The consequences of getting benefits management wrong 

Today’s infrastructure megaprojects commit tens of billions of pounds to building assets with lifespans of up to a century. The impact of bad decisions – financial, social, environmental, and even personal – can be enormous. 

Even delaying infrastructure projects can have severe consequences to the economy. In 2015/16, UK infrastructure spending delays and cancellations amounted to £4.6 billion, according to Arcadis’ Spiralling Cost of Indecision report. But how can we make sure we are making the right decisions? 

The best approach to managing long term benefits is one underpinned by a commitment to sustainability – respecting people, the planet and mutual profit. Typically, infrastructure projects aim to provide short- and long-term benefits in each of these areas. But how to tangibly demonstrate the value in these areas is a challenge. 

It’s not just about money – legacy benefits are crucial 

The UK infrastructure sector has developed a strong culture of managing cost and schedule, often to the exclusion of other considerations; meaning benefits management in infrastructure is relatively new. Mapping the complexities of how to actually deliver the benefits that will result from a megaproject is particularly challenging. 

A focus on legacy, as well as operational, benefits is fundamental. We need to move beyond the familiar realm of cost efficiencies, time savings, and return on investment to include wider effects such as job creation, economic growth and carbon dioxide reductions. This approach means clients can clearly plan and articulate true benefit.  They can prove that they have not only met the basic requirements of the project, but also achieved what their customers really care about, and the things which will be important to them across the lifespan of the infrastructure. This is particularly important given the rapidly changing technology landscape where future uses may be very different to today. 

Demonstrating the value of infrastructure projects

Arcadis is currently working on a number of UK infrastructure megaprojects, including around high speed rail  and as part of the Cascade joint venture team supporting Highways England on the Lower Thames Crossing. Much of our work focuses on how we can shape the projects now, in order to maximise the long-term benefits that will be realised later when the project is complete. Managing benefits in this way is now embedded in every element of both projects, from governance and procurement to specialist technical decisions.

In all of our work, we have radically departed from the traditional, ‘painting-by-numbers’ approach, designed when infrastructure programmes were smaller and less complex, to create an ownership model that works at this scale. Client and supply chain staff are empowered and personally incentivised to ensure the ‘softer’ benefits of a scheme are met, as well as the usual time and cost constraints. Benefits captured in the register are built in at the procurement stage, ensuring that the supply chain understand and work to deliver them. And we continue to support the huge cultural shift of working in this way. 

Sarah Andrews, Lead Development Manager for Gatwick Airport, another major UK infrastructure programme, sums it up:

“Arcadis’ approach will deliver significant value to Gatwick over the coming years; ensuring the right projects are selected to maximise the outcomes and therefore deliver the optimal value to Gatwick.”

A real commitment to benefits management in the UK connects the dots for Government, investors, taxpayers and service users, shaping large and sometimes disruptive infrastructure projects to their needs. Continuing to manage long-term benefits and integrate this approach into UK infrastructure delivery means the sector can make intelligent and sustainable decisions, for long-term quality of life.

Nora Taylor

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