8 July 2024

Labour must match rhetoric with action on planning reform


No one likes elephants in the room. It takes determination and bloody-mindedness to ignore them beyond a certain point, but Keir Starmer has shown surprising stamina in turning a blind eye to the herd. Trumpeting more loudly than most is the elephant marked ‘public infrastructure’.

Any politician can win easy plaudits at the moment by saying we need to invest more in infrastructure. The need is obvious: last summer it was revealed that hundreds of schools and colleges had dangerous reinforced autoclaved aerated concrete; the sewage system is increasingly overwhelmed; road building projects are behind schedule; and even Network Rail admits that the system is overburdened and failing. That is without even mentioning the chronic housing shortage.

The Labour Party talked a lot about infrastructure in its election manifesto. It promised £1.8 billion in public and private investment to upgrade ports and £1.5 billion to build new gigafactories, as well as fixing a million additional potholes and tasking Great British Railways with the management of ‘investment, day-to-day operational delivery and innovations’.

Starmer and his Chancellor, Rachel Reeves, have been reticent on the quantum of money they are willing to spend and the manifesto referred coyly to plans to ‘strategically use public investment where it can unlock additional private sector investment’. Even this politically calculated evasiveness, however, fails to address an underlying challenge.

Bluntly, we are terrible at major public infrastructure projects in the UK. Last week, it was reported that the compensation bill for High Speed 2 (HS2) has increased by an additional £232 million, much of it for parts of a proposed network which will now not be built. That, however, starts to look like small change when the project as a whole is comprehended.

HS2 was first conceived towards the end of the last Labour government, 15 years ago, and has been plagued by revisions and reductions in scale, as all the while the schedule has lengthened and the budget has soared. The current forecast is that by 2033 – having taken nearly a quarter of a century, therefore – it will deliver a 134-mile rail link between London and Birmingham at a final cost of well over £100 billion. That is clearly mad and unforgivable.

Yet HS2 is only the most grotesque failure. The Sizewell C nuclear power station in Suffolk was proposed in 2012: it may cost as much as £30 billion and take 12 years to build and commission, but construction has yet to start. The Conservative Party’s 2019 manifesto promised to build 40 new hospitals in England by 2030 and has so far seen one cancer centre opened. Even the restoration and renewal of the Palace of Westminster, approved in 2018 but long discussed before that, has yet to begin in earnest and could cost £13 billion over nearly three decades.

It was telling – one might say ominous – that Labour’s manifesto had nothing to say about HS2, which has already been appallingly mismanaged and dismembered. The document did refer to ‘a long-term strategy for transport, ensuring transport infrastructure can be delivered efficiently and on time’, which sounds as much like an intercessory prayer than a political commitment.

HM Treasury oversees the National Infrastructure Commission, an executive agency which once every parliament publishes a National Infrastructure Assessment, but the new government plans to merge this with the Infrastructure and Projects Authority to create a National Infrastructure and Service Transformation Authority (NISTA). Darren Jones, now Chief Secretary to the Treasury, said in May that the new body would ‘be laser-focused on delivery and play a critical role in setting the path we need to drive growth’, adding that ‘a Labour government will get Britain building again’.

Is this enough? Jones talked about ‘a huge amount of inertia’ in the planning and construction system, and that is hard to to deny, but his rhetoric echoes that of many senior Labour figures and implies that the major problems which have affected policy delivery are essentially attributable to not trying hard enough. We hear about ‘focus’, ‘providing certainty’ and ‘driving effective delivery’, to which the private sector has of course given a cautious welcome. For all of the caution and expectation management Starmer and his team have emphasised, however, there is a lingering sense of overconfidence.

There must be drastic reform of the planning process. Labour has certainly talked a good game here, promising to ‘make major projects faster and cheaper by slashing red tape’ and, somewhat generically, to ‘ensure the planning system meets the needs of a modern economy’.

But the constraints fundamentally stem from the Attlee government’s Town and Country Planning Act 1947 and its successors, especially the 1990 statute, and radical change will only come by facing down some local communities, intruding on at least brownfield if not greenfield sites and substantially curtailing the process of consultation and potential appeal. That could represent a huge cost in political energy and capital.

The Labour Party has been out of office for a political generation. Only seven members of the 22-strong cabinet were even in Parliament when Gordon Brown was Prime Minister. The size of the new government’s majority has earned it something of a honeymoon, but issues like infrastructure and economic development do not exist in a vacuum: they are effectively in perpetual competition with the rest of the world, and the global community will not stop and wait.

By word or deed, Starmer, Reeves and others will need to demonstrate quickly that they have understood why public procurement has failed so badly in the past, what institutional and systemic flaws need to be addressed alongside mere efficiency and willpower. Doing all of this, and making tangible progress without resorting to substantial public spending, represents a huge challenge. The private sector is ruthless and transactional, and it must be assured that there is substance underneath the earnest declarations of ubiquitous ‘resets’ and ‘turning the page’.

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Eliot Wilson is co-founder of Pivot Point Group.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.