This is a story about a rare flying mammal, a tunnel and a major infrastructure project.
Myotis bechsteinii, better known as Bechstein’s bat, lives in woodland and roosts in old woodpecker holes or tree crevices. Growing to a maximum size of 5.3cm with a wingspan of up to 30cm, they are nocturnal, hibernate during the winter and mate in autumn and spring, with maternity colonies of up to 30 females forming in April and May. They are also protected by the Wildlife and Countryside Act 1981 and designated a priority species under the UK Post-2010 Biodiversity Framework.
HS2 is spending £100m on a 1km concrete tunnel to prevent bats being hit by high-speed trains in an area called Sheephouse Wood in Buckinghamshire. One problem remains. No bats roost there.
HS2 chair Sir Jon Thompson admits the tunnel will be a “blot on the landscape” and had to be built despite “no evidence” that bats were at risk from trains. Despite parliamentary approval in 2017, HS2 still had to secure more than 8,000 additional consents, chomping up time and resources.
The bats’ welfare was one of them.
Natural England, the government’s conservation adviser, stated it had “not required HS2 Ltd to build the reported structure, or any other structure, nor advised on the design or costs”. It was consulted on “whether the proposal designed to mitigate the impact of the railway on rare and protected bats was sufficient to comply with environmental law – we advised that it was”. However, HS2 has “to make choices, consider risks and factor in costs when deciding how to comply with environmental law”, the adviser added.
For the now former transport secretary Louise Haigh, the “bat shed” saga was “the tip of an iceberg”. A review of HS2 was triggered. But bigger changes are afoot.
2025 sees the launch of the National Infrastructure and Service Transformation Authority. This will merge the National Infrastructure Commission’s strategic infrastructure planning role with that of the Infrastructure and Projects Authority on delivering major projects. NISTA should be operational by the spring. The government’s 10-year national infrastructure strategy is also due.
So, why is the UK so bad at delivering major infrastructure projects? Last October, an NIC study admitted that “infrastructure costs in the UK are too high and have been so for decades”. Infrastructure projects are “perceived as poor value for money, or have not been delivered to time or budget”.
Take three high-profile examples. HS2 is on track to cost £66bn against £37.5bn when first estimated. Hinkley Point C was budgeted for £18bn when given the green light in 2016 but will cost £35bn. And London’s Elizabeth Line had an original budget of £14.8bn but finally cost £18.8bn.
Four lines of failure
The NIC identified four interrelated factors. The first is a failure “to iterate effectively between a concept design which ensures desired outcomes and affordable budgets”. The second is a failure to plan projects well and build them fast. Then there is a failure to enable “repeatability” of projects to drive costs down. Lastly, there is a failure to invest in innovation.
“In the early stages of a project, efficiencies can be identified [that] can reduce costs while still delivering project objectives,” the NIC said.
“If changes are made during the delivery stages, delays and redesigns tend to be far more costly.
“Getting a project right in the scoping and planning stages is crucial to minimise these changes. Being able to repeat similar types of projects within a stable pipeline also enables learning and standardisation, which can drive down costs in the long term.”
The NIC also identified four root causes of such systemic failures: a lack of clear strategic direction; challenges with project clients and sponsors; inefficient consenting and compliance; and a constrained supply chain.
Strategic direction has been a problem for decades across “successive governments”. None of them have been “able to identify, with a single voice, what the most important infrastructure projects are to achieve its goals and then to ensure it is collectively working to deliver them on time and to budget”.
The short-term nature of public spending commitments has also damaged the confidence of prospective private sector investors, with long-term consequences. If the UK’s economic growth had matched the OECD average in the past 14 years, the economy would be £140bn larger, says Treasury chief secretary Darren Jones, generating £58bn more in tax revenue to invest in public services.
The NIC’s findings point to “a lack of strategic clarity as one of the root causes”, he adds.
“Behind the complexity of the numbers, the graphs and the data, there is a simple truth. What investors need most from government is trust – and, sadly, that trust has been broken.”
The NIS will tackle “core economic infrastructure” such as transport, energy and housing, as well as “social infrastructure” like schools and hospitals, which Jones promised would be coordinated across government departments.
Will NISTA and the NIS make any difference? The jury is still out ahead of crucial details. Robbie Owen, partner and infrastructure expert at Pinsent Masons, says the Treasury and Cabinet Office “will need to get a wriggle on” to ensure both are up and running on time.
Mind the consenting gap
“Some fundamental questions remain to be answered, such as what sort of process will govern preparation and approval of the NIS, including parliament’s role; what it means for a project to be included in the NIS; and what the process should be for cancelling projects, as there is no doubt that the UK’s habit of chopping and changing has only added to the cost of delivering major infrastructure,” Owen says.
BDB Pitmans’ infrastructure planning partner, Angus Walker, says the NIC was not established by statute and “was probably given less attention by previous governments because of that”. This year’s Planning and Infrastructure Bill could redress that. NISTA also has a “shorter horizon”, looking 10 years ahead compared with the NIC’s 30-year timespan, with a wider remit covering social and economic infrastructure, he adds.
“That is probably fair enough, because it is almost impossible to predict what is needed so far into the future, and widening the scope will only make that even more difficult.
“Although it should help with the planning and delivery of infrastructure projects, the two organisations that are merging deal with both ends of the process – strategy and delivery – but there is a gap in the middle, about the consenting process for projects, that is covered by neither. It would be good if NISTA looked at projects all the way through.”
John Kavanagh, infrastructure programme director at BusinessLDN, which lobbies for London’s businesses, welcomes NISTA’s arrival but warns that merging the NIC into an arm of the government “should not mean it loses its role as a valuable independent voice scrutinising long-term infrastructure plans, free from ministerial cycles”.
For the NIS to be effective, “it should include a credible project pipeline, free from the kind of chopping and changing around the scope of projects that we’ve seen in the past, which damages investor confidence”.
He adds: “The new pipeline must give the private sector the certainty to make decisions and scale-up supply chains in advance of demand. The strategy should also establish the expanded use of innovative funding models – such as the regulated asset base model applied to the Thames Tideway Tunnel super-sewer and the Contracts for Difference scheme for offshore wind – and give the private sector clarity on what these models will look like.
“No project pipeline will ever be credible without a clear understanding of the skills capability required to deliver major projects – and this capacity-building needs to be recognised in the upcoming industrial strategy.”
A modern history of UK infrastructure
Planning permission for major infrastructure changed significantly with the passing of the Planning Act 2008.
Previously, proposals had to negotiate several different legislative regimes, such as town and country planning, transport and works, electricity, harbours or hybrid bill procedures in parliament.
The 2008 Act introduced a simplified system of national policy statements for larger projects. Twelve designated NPSs set out government policy on different infrastructure development – six cover energy schemes, three focus on transport, and three others deal with hazardous waste, waste water and water resource infrastructure.
The legislation also introduced development consent orders to authorise nationally significant infrastructure projects (NSIPs). The Planning Inspectorate administers and examines a DCO application before making a recommendation to the relevant secretary of state, who takes a final decision. The process can take 12 to 18 months.
Before the NSIP system, major infrastructure projects took significantly longer to negotiate the planning system. The planning application for Heathrow Terminal 5 took eight years from first application to government approval.
Infrastructure and procurement
A raft of medium-term capital expenditure initiatives dominate the attention of the procurement sector, particularly [the coming] Spending Review, housing strategy, National Planning Policy Framework reforms and the NIS. These will give the whole supply chain “the certainty to invest in the skills and capacity to help deliver them”, says Noble Francis, economics director at the Construction Products Association.
“In the past, governments had national infrastructure and construction pipelines, but they ended up mainly as wish lists as projects were often paused, delayed, reviewed or cancelled,” he adds. “The new government has shown a lot of positive intent, although delivery may be its key issue.
“Previous governments persistently had problems delivering major infrastructure projects as they were treated as large one-offs and failed to deliver consistent pipelines of major projects in a certain sector.
“Major infrastructure projects around the world go over budget and over time, but the more of that type of project that is done, whether it is high-speed rail or nuclear power stations, the more the learning and investment in capacity and skills, and the lower the average cost becomes.”
Mace Group’s global director of cost and commercial management, Ceri Evans, sees NISTA as an opportunity “to reset and recalibrate approaches to infrastructure procurement, cost analysis and partnering”.
However major projects can be disrupted by “everything from global geopolitical events to localised planning hurdles”, she warns. “Working with the industry to anticipate and overcome potential disruption to improve project resilience and deliverability will be near the top of NISTA’s to-do list.”
Upfront, pre-project advice can make the biggest difference and lead to the right procurement model being adopted, Evans adds, pointing to preliminary market engagement notices introduced under the Procurement Act 2023.
“A focus on working with the industry to support the evolution and renewal of procurement models will reap rewards for NISTA and the projects delivered in the UK infrastructure pipeline under its auspices,” she adds.
