The Government has brought down infrastructure costs for the third year running, according to the third annual report of the Infrastructure Cost Review programme published today by HM Treasury.
The report follows on from the Infrastructure Cost Review in 2010 set out a series of actions to change the behaviour of government clients and industry that would support a 15 per cent reduction in the costs of infrastructure delivery. The Government launched the Infrastructure Cost Review programme in March 2011 to transform the way the UK delivers infrastructure.
This year’s report demonstrates significant improvements arising from more collaborative behaviour, and identifies over £3 billion per annum of cost savings – equating to savings averaging over 15 per cent across infrastructure sectors.
According to the report , the Government is on track to meet the objectives set out in 2010. At the current rate of saving, the report says there is an opportunity to deliver efficiencies for taxpayers and consumers of more than £50 billion over the next decade.
Commercial Secretary to the Treasury, Lord Deighton, said:
“Successive governments have failed to invest sufficiently in the UK’s infrastructure. By dealing with our debts and having a long term vision as set out in the National Infrastructure Plan, we can deliver the world class infrastructure the UK needs to compete. Delivering infrastructure investment more efficiently is vital to ensure that taxpayers and consumers get more for less.
“The Infrastructure Cost Review programme has helped to establish a refreshed relationship and more open dialogue between government and industry. This has been a success for the third year running. However, we cannot be complacent. As the economy recovers, we will redouble our efforts to ensure that we have the necessary skills, capacity and innovation to embed cost and efficient delivery.”
Simon Kirby, Chair of the Infrastructure Client Group, said:
“I welcome the involvement of clients and industry delivering the Cost Review objectives and the development of the Project Initiation Routemap. Focussing on matching capability with complexity and the enablers of successful delivery will significantly improve project outcomes. The Infrastructure Client Group looks forward to supporting the forward programme of the Cost Review and implementation of the Routemap. We will continue to provide a forum for clients to share experiences and best practice to support successful infrastructure delivery in the UK.”
Based on the independent industry survey and other evidence set out in the report - rail, highways, water and flood defence have achieved progress through adopting principles consistent with Cost Review objectives, improving collaborative engagement with their supply chains, better governance, grouping projects into programmes and using smarter procurement processes.
The report sets out four key themes for the next steps of the infrastructure cost programme: continued improvement to pipeline visibility and certainty; building on longer-term funding to support whole life planning and better control of costs and risk; greater front-end focus to improve project initiation and procurement; and supporting the improvement of supply chain skills and innovative construction delivery.
The ‘Project Initiation Routemap Handbook’ was also launched today alongside the Cost Review annual report, which provides a framework to help identify and address many common and recurring problems in infrastructure projects.
The ‘Project Initiation Routemap Handbook’ was also launched today alongside the Cost Review annual report, which provides a framework to help identify and address many common and recurring problems in infrastructure projects.
Developed by Infrastructure UK in collaboration with industry and academics from the University of Leeds it builds on lessons learned by both the public and private sector. The Routemap provides a much needed framework to help identify and address many common and recurring problems in infrastructure projects and programmes.
The Routemap has already been applied successfully to a number of projects and programmes, including the Environment Agency TEP1 Programme and work on Anglian Water’s upcoming AMP6 Programme.
Click here to download the third annual report.
Click here to download the Routemap Handbook
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