The government’s Infrastructure Cost Review programme has delivered savings of around 15% across a number of sectors including highways.
The Infrastructure Cost Review in 2010 set out a series of actions to change the behaviour of government clients and industry that would support a 15% reduction in the costs of infrastructure delivery.
This year’s report demonstrates significant improvements arising from more collaborative behaviour, and identifies over £3 billion per annum of cost savings.
Based on the independent industry survey and other evidence set out in the report – rail, highways, water and flood defence have achieved progress through adopting principles consistent with Cost Review objectives, improving collaborative engagement with their supply chains, better governance, grouping projects into programmes and using smarter procurement processes. For example, the Environment Agency estimate that 25% of their efficiency savings have come from packaging of projects and procurement, 20% from streamlining project development and control of scope, with 55% from working with their supply chain to enable innovative value engineering. In other areas savings have been delivered through savings in technology cost, not necessarily through adopting Cost Review principles.
The report shows that the government is on track to meet the objectives set out in 2010. At the current rate of saving, there is an opportunity to deliver efficiencies for taxpayers and consumers of more than £50 billion over the next decade.
A ‘Project Initiation Routemap Handbook’ has also been launched alongside the Cost Review annual report, which provides a framework to help identify and address many common and recurring problems in infrastructure projects.
Commercial Secretary to the Treasury, Lord Deighton, said: “Successive governments have failed to invest sufficiently in the UK’s infrastructure. By dealing with our debts and having a long-term vision as set out in the National Infrastructure Plan, we can deliver the world class infrastructure the UK needs to compete. Delivering infrastructure investment more efficiently is vital to ensure that taxpayers and consumers get more for less.
“The Infrastructure Cost Review programme has helped to establish a refreshed relationship and more open dialogue between government and industry. This has been a success for the third year running. However, we cannot be complacent. As the economy recovers, we will redouble our efforts to ensure that we have the necessary skills, capacity and innovation to embed cost and efficient delivery.”
