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CN Briefing: Infrastructure and Projects Authority; Geoffrey Spence; Treasury

The importance of being ‘in’ with the key decision maker in Whitehall is a lesson the industry has had to learn as it sought to get closer to government.

The mantra in recent years of ensuring government decision makers are aware of the economic benefits of investment in infrastructure has in many ways worked.

But this generation of politicians and officials is beholden to the whims of the current chancellor, with his aspirations of being prime minister, and policy gets rubber-stamped or scrapped from within the offices of HM Treasury.

Running a Budget surplus is the government’s aspiration for the final year of its current term, a year in which the Conservative Party is also expected to be seeking its new leader.

Fiscal ‘responsibility’ and safeguarding is the battleground upon which Mr Osborne will set his stall against his likely opponents, but 2019/20 could also offer him the chance to oversee some vital headline-grabbing schemes and policy moves.

He may make a play to be PM when the purse strings are being loosened, right in time for the next general election. Or he could benefit from PFI being back in vogue, with the benefits of private investment in social infrastructure, coupled with a restriction on PF2 private sector benefits that tarnished its predecessor PFI.

It should also coincide nicely with construction gaining pace on major infrastructure schemes like HS2 and new nuclear.

Will it come as a bitter blow to the industry though, to learn that the organisation charged with securing £200bn of investment in infrastructure over the next five years (mostly from the private sector) will now no longer sit within Mr Osborne’s Treasury?

Geoffrey Spence will leave his post in Infrastructure UK (just days after he scoffed at yours truly when I suggested the National Infrastructure Commission might pose a threat to the organisation).

Now, perhaps capitalising on the growing export potential of IPA, the government has merged IUK and the Major Projects Authority into a new IPA – the Infrastructure and Projects Authority.

IPA will sit within Cabinet Office rather than Treasury, albeit jointly accountable to that well-known infrastructure tzar (er…) Matt Hancock and the chancellor.

And that means that this body will not only cover major projects like Crossrail, but also the government’s Universal Credit welfare reform (where Mr Hancock comes in).

This government still trades on its decision to ‘approve’ Crossrail when it came to power in 2010, which must be a bugbear of its infrastructure commission chair who as transport minister at the time had the ceremonial honour of launching the first pile in 2009.

Today Lord Adonis is making the case for Crossrail 2 (potentially just in time for George Osborne to launch the first pile as prime minister in 2020).

Here’s hoping infrastructure investment stays top of the pile on the IPA chief executive’s desk.

 

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