‘Building splurge’ not the way ahead
In the run up to the 2017 Election (which now seems a lifetime ago), the IoD published a paper arguing for “frugal infrastructure” upgrades across the country and digitising infrastructure to turn “dumb assets into smart ones”.
The recent Budget included a promise of up to £37m to support development of Northern Powerhouse Rail to connect cities in the North with faster and more frequent train services. It remains to be seen whether the Treasury will fully commit to Northern Powerhouse Rail (previously referred to as High Speed 3 and Cross Rail for the North).
It is easy to be frustrated at the glacial rate of progress. Also, I have long been of the view that investment in infrastructure projects would be a better way of providing economic stimulus than quantitative easing (essentially printing more money and pushing it into the system) and would also leave a lasting legacy in terms of assets and work experience for those involved.
However, as the IoD has pointed out an unthinking “infrastructure splurge” would be a poor choice.
There is no point racking up more national debt (on the assumption that borrowing costs will stay low, which they won’t) on assets which don’t have a sound business case.
The IoD’s view is that each new project should have a robust business case and should be “future proof”. For those of us living in the North the business case for Northern Powerhouse Rail seems obvious. We also know that our economy would benefit enormously from improved road infrastructure.
As importantly (and identified by IoD members as their number one infrastructure issue), we need faster broadband. With better connectivity IoD members say they would employ more people, be more productive and profitable and enable more home working.
More agile working would relieve pressure on the physical infrastructure, whilst also reducing transport related emissions, thereby delivering an environmental and health benefit.
Better broadband would also breathe new life into smaller towns and villages by reducing the requirement for congregation in our major cities. It is an appealing vision and one that would in my view deliver exponential economic growth in the region.
The big question remains: How do you get things to happen, to move faster than up until now? I am believer that if you want something done you ask those with the most to gain to do it. That, very simply, is the case for regional devolution.
Whatever form it takes we need a small number of mayors (or their equivalents) representing all the areas of the region who can work together on matters such as infrastructure projects. Only then will things really happen and until then we will get £37m here and another £37m there if we are lucky.
Jonathan Oxley, Northern Powerhouse Ambassador and former regional chairman, Institute of Directors