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Construction minister warns against giving London priority on infrastructure investment

Construction minister Nick Boles has said it would be a “historic error” to fail to back HS2 or to make “huge” investments in London’s infrastructure before improving transport links in the North.

The issue of regional infrastructure investment was highlighted again this week when the prime minister and chancellor were in Leeds to speak at the launch of HS2 chairman Sir David Higgins’ report on high-speed rail connections in the North.

Just a day later, mayor of London Boris Johnson gave a keynote speech to reiterate the need for Crossrail 2 after Transport for London and Network Rail set out a preferred route, with a north-east alignment via Dalston and a protected spur to Hackney Central that could be extended.

Speaking exclusively to Construction News, Mr Boles said investment in London and the North should come “hand in hand”, but warned he “certainly wouldn’t be comfortable with the idea that you would not invest in the North and you were going to invest yet more in London’s infrastructure”.

“We were right to recommit to Crossrail… we needed capacity and I think the same argument is why any attempts to dilute the commitment to HS2 would be a dramatic, historic error”

Nick Boles, construction minister

Sir David this week published a report on the recommendations for the northern leg of the scheme.

His recommendations included a new transport body that would examine options, costs and a delivery timetable for an HS3 east-west rail connection.

Mr Boles said proposals to think more broadly about cross-country links in the North, including an HS3 route, was the right thing to do because it gave companies the opportunity to expand their businesses beyond London while still benefiting from the capital.

“I’m certainly in no doubt that even in very tough financial times we were right to recommit to Crossrail… we needed capacity and I think the exact same argument is the reason why any attempts to dilute the commitment to HS2 would be a dramatic, historic error,” he said.

The former planning minister, who Construction News revealed had been appointed to the construction brief in August, said it was important not to take a “like it or lump it” approach when planning projects.

“We’re certainly encouraging firms to look at forms of relationships, whether that’s joint ventures, partnerships – and we’re seeing different relationships form now”

Simon Kirby, HS2

He added: “We’re right to spend a long time and money and planning in trying to take on people’s concerns and make modifications, but ultimately this should not deflect us from the overarching national requirement for projects like HS2 to go ahead.”

Mr Boles said the Conservatives had maintained investment in infrastructure and demonstrated that the party did not just invest in “popular” projects.

“We do things in essence that in the long run will improve the economic competitiveness of Britain.

“So [I would say to industry]: stick to the plan. It’s beginning to work and benefit everyone.”

High Speed Rail: next steps

December 2014 Chancellor George Osborne will set out further detail on his plans to devolve powers to northern cities – paving the way for development on HS3 to move forward more quickly.

March 2015 The government will issue a report detailing how much it expects the construction of HS3 to cost. David Cameron said that if it costs the same per mile as HS2 then it will cost up to £7bn.

2016 First major construction contracts will be awarded following Royal Assent. Packages are split into six categories: design and services; surface route; railway systems; stations; tunnels; and rolling stock.

2017 Construction on HS2 expected to begin. Phase one from London to Birmingham will begin first under current plans, with Sir David Higgins stating that phase two is “three years behind” it. Phase one will open in 2026.

2027 Sir David recommended that the proposed North-west hub at Crewe should complete in 2027, six years ahead of current plans. The hub still has to be approved by politicians, as it extends phase one 43 miles further north than originally planned.

Procurement for construction contracts on HS2 is due to begin early next year, and HS2 chief executive Simon Kirby told Construction News that it is encouraging UK firms to look at partnering to win work.

“We’re certainly encouraging them to look at forms of relationships, whether that’s joint ventures, partnerships, whatever – and we’re seeing different relationships form now,” he said.

“It does depend on what part of the supply chain they’re in and what it is they’re going to do.

“In some cases you’ll get a UK SME that isn’t in the rail sector, or is in rail but outside the Network Rail/TfL space, that wants to do something on HS2. We’re certainly not against JVs.”

“There’s still a substantial uplift in construction activity, so I don’t think there’s any dramatic reason for concern in the industry”

Nick Boles, construction minister

Mr Boles, who has responsibility for construction and skills as well as the rail and retail sectors, said the biggest issue facing the construction industry was a lack of skills in the sector.

He said there had not been consistent investment into skills by the industry through the recession.

“It is a very fragmented industry, with the way in which the layers of contractors and subcontractors work, so it’s not quite clear who would take responsibility of that consistent investment through the down times.”

Mr Boles said the government had a role to play to incentivise more apprenticeships and make the industry more attractive for new entrants, but that this must go all the way down the supply chain to properly address the problem.

The minister said he was not concerned about the effect a recent spate of profit warnings from contractors would have on the UK’s wider economic recovery.

“There’s still a substantial uplift in construction activity in residential, commercial and big infrastructure projects, so I don’t think there’s any dramatic reason for concern in the industry.”

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