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FRAYNE James

James Frayne is Director of communications agency Public First and author of Meet the People, a guide to moving public opinion. The focus of this column is Theresa May’s conservatism for “ordinary working people”.

Issue:  New infrastructure spending in the Autumn Statement

Background

Philip Hammond suggests infrastructure spending provides better value for money than tax cuts. This claim is debateable. Government models are notoriously complex and often inaccurate. The cost-benefit analysis rarely stands up to later scrutiny. But infrastructure looks set to be the focus of the Autumn Statement.

From the 30,000 feet view of the Treasury, it can appear there’s little differentiation between “good” infrastructure and just “any” infrastructure spending. This seemed true under Gordon Brown, who prioritised infrastructure spending and landed us with programs like the wasteful Building Schools for the Future.

State-sponsored infrastructure projects have been essential for growth – from the Roman Roads to Victorian sewage systems. But these responded to clear, desperate need (trying to keep an Empire under control and preventing cholera epidemics that killed thousands).

What is the modern-day equivalent? What should a Chancellor who really cares about value for money and wishes to support the “Just About Managing”, focus on? Before picking projects, here are three dimensions that Hammond must consider:

  • National vs local.  While George Osborne made moves towards more localism, big infrastructure is predominantly a nationally-directed affair. Brunel’s Great Western Railway, in contrast, emerged from successful Bristol businessmen. Bath was the realisation of a local resident and architect’s dream.
  • Private vs public.  Few people feel that PFI was a triumph. Giving the private sector all the upside while lumping taxpayers with the risk is a poor deal. But many of our great former projectshave involved financing from the private sector. The introduction of strangling planning rules and regulations in 1945 makes this harder to achieve.
  • Incrementalism vs ‘grand projects’.  Supporters of the first point to our failure to deliver high quality projects at a decent price, on budget and on time. They decry politicians’ vanity and their desire for big projects that deliver little for ordinary people. Supporters of the second mourn the loss of ambition of the Victorian era and ask why we can’t emulate former glory.

Both have a point. But if the Just About Managing are our focus, incremental improvements would make a bigger difference: the lower middle class residents of provincial towns will see far less benefit from most recent big projects than urban ones.

What next?

Here are the top three areas for the Chancellor to focus on:

  • Housing.  The cost of homes continues to soar and savings continue to dwindle.  As I’ve written before, this hits the Just About Managing particularly hard. It’s hard to find a better-evidenced problem. This is an area where government incentives and regulatory change, as much as direct spending, could make a large difference.
  • Roads.   The Just About Managing don’t use trains – they drive. Local road schemes would do a lot to improve their lives and be a better investment than endless fiddling with London’s roads. Delivery of current schemes, including between Newcastle and Scotland, would help.
  • Networks.  Digital infrastructure is one of the few that businesses say has improved and they are confident will continue to improve. But there are still major “not spots” – as the recent report from the Big Infrastructure Group, chaired by Grant Shapps, outlines.

11 comments for: James Frayne: How to spend on infrastructure wisely and well

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