Infrastructure Cost Review
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The Infrastructure Cost Review was a 2010 report commissioned by the government of the United Kingdom and written by Infrastructure UK to find efficiency savings in the delivery of infrastructure projects. The British government aimed to make savings of up to £3 billion per year on current expenditure by 2015, primarily in the pre-construction phase. The report made a series of recommendations for changes in government procurement and planning. Cost savings were quickly realised and Infrastructure UK reported savings of £1.5 billion at the end of the first reporting year and £3 billion by 2014. The programme was projected to have saved £50 billion in expenditure by the end of the 2010s. Infrastructure UK was absorbed into the Infrastructure and Projects Authority which launched its Transforming Infrastructure Performance in 2017 which aims to make £15 billion in annual savings.
The incoming Conservative-Liberal Democrat coalition government made a commitment in the June 2010 United Kingdom budget (dubbed an "emergency budget") to launch an investigation into how to reduce the cost of major infrastructures and to report back by the end of the year. The report was issued in December 2010. The government had committed to spending £200 billion on infrastructure projects over the following five-year period.[1]
Findings
The report showed that no single factor was driving excessive costs but rather a combination of factors, they were mainly incurred during the pre-construction phases:[1]
- Stop-start investment with a poor pipeline of guaranteed future works
- Lack of clarity in planning and design decisions with projects often starting before design is complete
- The perception that the contingency budget forms part of the overall budget and is available to spend
- Over-specification and use of bespoke designed solutions rather than off-the-shelf products
- Overly complicated bidding procedures
- Lack of strategic thinking by the supply chain
- Lack of investment in skills and training
The report showed that increasing fragmentation of the construction industry and a shift towards greater use of sub-contracting had also led to cost increases. The report writers considered that there was an opportunity to make savings of around 15% in infrastructure spending (£2-3 billion per year).[1]