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Infrastructure ‘blueprint’ sets out savings

Infrastructure UK (IUK) has identified ways to save up to three billion a year on building and maintaining infrastructure.

Speaking in December, Treasury Ministers welcomed a new report produced by IUK, saying it could promote growth by freeing up more money for infrastructure investment, as well as helping keep water, gas and electricity bill costs down for consumers by reducing costs for utility companies.

The report outlines how costs of building and maintaining energy, transport, waste and flood defence infrastructure projects can be reduced by at least 15%. With between £15-20 billion being spent each year, this equates to savings of between £20 -30 billion over the next decade.

The savings in delivery cost would be achieved by government working with industry to improve procurement, raise productivity, simplify processes and promote innovation and better industry integration.
The report concludes that:

• there is a lack of certainty over long-term workflow;
• the UK over-specifies and applies unnecessary standards;
• strategic investment is constrained because industry is fragmented;
• blurring of decision-making roles make governance inefficient;
• competitions are burdensome and stifle innovation; and
• a lack of data limits capability to set challenging targets.

With these barriers to efficiency in mind, those contributing to the report went on to identify ways to reduce costs in the delivery of UK infrastructure by:

• eliminating peaks and troughs in the infrastructure investment pipeline;
• improving client leadership, streamlining project governance and procurement;
• reducing unnecessary prescription, standards and third party requirements;
• improving asset management and benchmark data;
• developing smarter ways to use competition; and
• encouraging industry to invest more in innovation and skills.

Commenting on the publication of the report in December, Terry Hill, chair of the IUK Steering Group, said:

“Achieving the potential benefits of £2-3 billion per annum requires a sustained and multi-faceted approach from government and industry. Evidence from the investigation suggests a high degree of consensus that efficiency improvements can be achieved and that the infrastructure construction industry will respond positively to client side improvements in planning, commissioning and procurement of projects and programmes. Clients will respond in turn to improvements in industry by becoming more efficient and transparent.”

The Government is now working to finalise a prioritised programme for implementation to be announced in time for the 2011 Budget.

For more information and to read the report and its key recommendations go to www.hm-treasury.gov.uk

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