The current regime for planning of major developments is not able to ensure that projects are supported by the public. Other countries can show the UK how to improve participation and take better decisions.
The UK must improve its infrastructure in a number of areas such as energy generation, transport, water, and telecommunications.
These improvements will be crucial for our future economic prosperity, however successive governments have struggled to create adequate conditions for private investors to anticipate and meet these needs. Problems have also been encountered in making investment decisions that are supported by robust evidence; and to build infrastructure in ways that secure public consent, especially from local communities affected by infrastructure projects.
Our Political Economy of Infrastructure paper, published earlier this week, concludes that these problems reflect a lack of effective deliberative institutions at the heart of policy-making processes around infrastructure.
Poor investment decisions lock the economy into inappropriate infrastructure systems for many years, which damages future prosperity. Yet the evidence reviewed in our report suggests that the way the UK makes these strategic decisions is inefficient and often lacks public consent.
The most significant problems with UK decision-making on infrastructure include:
- short-sightedness and lack of a forward-looking strategy
- political risk and uncertainty having an impact on private investment
- weak evidence base underpinning projects that have cross-party support
- failure to secure local community consent
These problems reflect a lack of effective space for meaningful debate and engagement at the heart of policy-making processes. To make the process around infrastructure decision more constructive, the UK needs to foster better participatory democracy and deliberation.
Our report presents a number of projects (such as HS2 and Thames Tideway) and policy areas (e.g. energy and airport capacity) that illustrate vividly the nature of these problems, which stem from a lack of strong deliberative institutions that effectively engage politicians, experts, interest groups and local communities in the policy-making process.
This ‘institutional gap’ often leaves the decision-making process exposed to unconstructive interactions from party political tactics, as well as pressure from interest groups with legitimate claims on infrastructure decisions and hostility from local communities to individual projects. This is exactly the type of environment which breeds high-profile legal challenges, public campaigns, political lobbying, public protest and, ultimately, inefficient decision-making.
The paper identifies several international examples which the UK could learn from/ They range from policy-making processes designed to facilitate discussion, negotiation and agreement between groups with interests in specific infrastructure projects, to institutions at arm’s length from government conducting analysis of topical policy issues and engaging the public.
The Australian Productivity Commission, an arm’s-length body responsible for independent advice on microeconomic policy and regulation, has been successful in fostering informed public and political debates about strategic policy decisions. The Commission’s public inquiries usually tackle complex, contentious issues that often have significant impacts on different groups in society.
The French and Dutch offer useful examples of ways of facilitating discussions between key interested parties, with a view to reaching agreement on the delivery and operation of specific infrastructure projects.
In the Netherlands, the ‘Alders-table’ is a consultative body specifically designed to formulate advice to government on plans for Schiphol airport. It successfully created an ‘arena’ where national and municipal governments, representatives of the local communities, and the parties involved in aviation were drawn together to discuss mutually advantageous solutions. That success inspired the creation of other similar consultative bodies across the country.
In France, the 'National Commission of Public Debate', a state-funded, independent body, has been playing an important role in ensuring the public participates effectively in the decision-making processes about projects that have major effects on the environment and/or on land use. This has given citizens from all walks of life an opportunity to investigate whether a project is worthwhile, to reflect on its objectives and main features, and to express their opinions in ways that can influence design and implementation.
These examples highlight the benefits of approaches that seek to build consensus by facilitating informed dialogue between experts, interest groups, and the wider public. Successfully addressing the UK’s challenges will require large-scale investment and significant shake up of the way things are currently done, and the examples in this paper chart a way forward for reforming the governance of infrastructure investment.
Miguel Coelho is a senior economist at the Institute for Government, and leads the institute's work on economic growth.
