Infrastructure shake-up risks uncertainty, warns ACE
The government has announced another major shake-up on infrastructure planning, by merging the Treasury-run Infrastructure UK (IUK) and the Cabinet Office’s Major Projects Authority (MPA) into a new body called the Infrastructure and Projects Authority.
The news comes just weeks after the creation of the new National Infrastructure Commission, which will be responsible for long-term planning and prioritisation of infrastructure projects.
The new IPA will start work on 1 January 2016, reporting jointly to the Treasury and the Cabinet Office, and led by chief executive Tony Meggs, who currently runs the MPA.
Geoffrey Spence, the current chief executive of IUK, is taking up a post in the City.
Nelson Ogunshakin: warning
Commenting on the news, Dr Nelson Ogunshakin OBE, chief executive of the Association for Consultancy and Engineering, pointed out that the merger risked creating additional uncertainty for potential partners and investors.
He said: “We will obviously have to wait for further details to emerge as to how this new organisation will operate, and the wider implications within the newly created National Infrastructure Commission led by Lord Adonis. In the meantime, however, government must ensure it works closely with the infrastructure sector to minimise the uncertainty this policy could create.
“Infrastructure projects take years to develop and deliver, with any possibility that they might change causing companies that might be involved to be very reluctant to invest.
“Only close collaboration and assurances that this merger does not mark a wholesale shift in government policy during the transition period will calm the market. We hope the government and the new authority led by Tony Meggs will heed this warning."
The 70-strong IUK was established in 2010 to support major infrastructure projects with public funding, such as Crossrail. It also leads on PFI policy, and negotiates infrastructure guarantees, under which up to £40bn is available to support investment in UK infrastructure projects.
The 80-strong MPA was established in 2011 with a mandate to oversee the largest government projects. It provides support and oversight to projects in the Government Major Projects Portfolio, which includes physical infrastructure, buildings and IT and change management programmes such as the Universal Credit roll-out.