Britain is uniquely bad at building infrastructure. It’s costing us billions

26 September, 2023
Daily Telegraph, by Philip Johnson

The Act of Parliament permitting the construction of the Great Western Railway was passed in September 1835. By 1841, the 116-mile line to Bristol had been completed. It is extraordinary to think that virtually the country’s entire network was laid down in the ensuing half century. The Channel Tunnel link, or HS1, which opened in 2007, was the first new railway in England for more than 100 years; HS2 to Birmingham will be the second and will take about 25 years from conception to opening, assuming it goes ahead.

Obviously, Isambard Kingdom Brunel’s GWR differed from the HS2 project in many ways. The country was emptier, the population smaller, regulation almost non-existent, and labour cheap as the countryside emptied after the Industrial Revolution. But Brunel also faced difficulties, with objections from landowners along the route and from rival transport interests, notably the canal and coach companies. As with HS2, tunnelling and viaducts added mightily to the bill, which ended up, at £6.5 million, double the projected budget. More than 100 of the 4,000 workers involved were killed in its construction.

Nor is so-called Nimbyism a modern phenomenon. The arrival of the steam train was greeted with horror, as the railways snaked their way across pristine meadows and tunnels were blasted out of the hillsides. The speed of construction left contemporaries bewildered; nothing quite like it had been seen before, and the literature of mid-Victorian Britain, from Middlemarch to Dombey and Son, reflected popular concerns.

Comparisons with events 150 years ago may not be helpful to an understanding of the way we handle infrastructure projects today, but, in the case of the high-speed rail fiasco, two differences stand out: Brunel’s line was funded entirely privately, and he built it from both ends.

Had the finance for HS2 been raised through a bond issue, involving private investors and pension funds, there would surely have been much tighter control over costs. Moreover, it was suggested at the outset that construction work should start in the North. Had it done so, there would be no question now of abandoning that part of the link, something ministers are said to be considering.

Rishi Sunak does not want to go to the Conservative conference in Manchester this weekend having just scrapped the HS2 link to the city, so he is expected to delay any final decisions about the future until the Chancellor’s Autumn Statement in November.

The Prime Minister is said to be appalled by the spiralling costs of the project, now expected to top £100 billion, but he cannot be surprised since it has been apparent for years that the finances were out of control. Nor is this confined to HS2. Britain appears to be uniquely useless at delivering major infrastructure projects on time – or close to the projected date – and within budget, or something approximate to the expected costs.

The question Mr Sunak needs to be asking is why infrastructure projects in Britain are so extortionately expensive. HS2 started off at £32.7 billion, which seemed steep enough. High-speed lines have been built in France, Japan and Spain at a tenth of the projected cost of HS2. Even allowing for greater population density in the UK (though Japan is pretty crowded, too) that is an extraordinary cost difference.

Heathrow’s third runway, should it ever happen, could cost around £19 billion. Even the car park could swallow £800 million. The Dutch built a fifth runway at Schipol Airport for £300 million. Two Royal Navy aircraft carriers cost more than £6 billion, yet do not have enough fighters. The Hinkley Point C nuclear reactor will cost around £26 billion to construct, with an ongoing public subsidy at one point estimated at £50 billion.

A tunnel for the A303 under Stonehenge, estimated to cost £183 million when first proposed 20 years ago, was recently given the go-ahead by the Government with a price tag close to £2 billion. Does anyone think that will not be surpassed?

A study by the think tank Britain Remade found that the UK is spending up to eight times more on rail and road projects than our European neighbours. Why is this? Sam Dumitriu, head of policy at the organisation, said: “One reason is that we give too much power to people objecting to projects and end up in a situation where schemes are gold-plated. Another is that we don’t use off-the-shelf designs as much as we should do. And the planning system requires contractors to do huge amounts of work.”

The study showed that France built 21 new tram systems in the past 25 years while Britain only completed a handful. In France the cost ranged from £29 million per mile in Besançon to £60 million per mile in Orleans. The second cross-city tram in Manchester cost £252 million per mile. Even London’s Elizabeth Line, hailed as a shining beacon of infrastructure development, cost more than £18 billion, when adjusted for inflation, making it one of the world’s most expensive metro systems.

Yet an 81-mile subway network in Madrid cost just £68 million per mile. While the first phase of HS2 may end up costing £396 million per mile, a high-speed rail link between Paris and Strasbourg came in at £31 million per mile.

These are such startling differences that there must be something specifically and seriously wrong with the way these projects are handled in Britain and it is incumbent on the Government to do something to stop it, not just wring its hands when matters get out of control.

Among the explanations given are historic under-investment in repairs and renovation of ageing infrastructure; the higher cost of new schemes; a shortage of engineers, which pushes up prices; the cost of land, which tends to be more expensive than in other countries; onerous planning laws; overly generous compensation arrangements; and woefully poor procurement and contract management.

There is also a reluctance to learn from good practice elsewhere or to take up ideas from outside, such as Lord Bamford’s suggestion in a letter to the Telegraph to use the HS2 network as a delivery system for the electricity cabling needed to distribute offshore wind power across the country. The National Grid upgrade is the next great infrastructure fiasco waiting to happen unless the Government gets a grip now.