Wrestling with the industrial strategy


As years go, 2016 was a pretty tumultuous one, with the EU referendum followed by a new prime minister, chancellor and transport secretary.

In November Theresa May, the last woman standing in the battle to replace David Cameron, promised a green paper on a new industrial strategy ‘before the end of the year’ and a white paper early in the new year.

Transport Network has learned that the green paper will not itself be published until the New Year. But with council directors telling Surveyor the strategy will be ‘the next big thing for us’, we look at the issues ministers are having to wrestle with.

Up in the air

On the environment, 2016 saw the Government’s approach to tackling illegal levels of toxic air pollution come under fire from the courts and MPs, not to mention the new mayor of London.

In a letter to environment and transport ministers, Neil Parish MP, chair of the Environment, Food and Rural Affairs Committee, accused the Government of failing to grasp the serious impacts of poor air quality.

In a subsequent Commons debate, Mr Parish pointed out that the courts have twice found ministers’ approach to pollution to be unlawfully inadequate. ‘To lose once in the Court could be seen as careless; to lose twice is negligent,’ he said.

A vision of the future at an expanded Heathrow

Few schemes demonstrate the fault lines between economic growth and environment as much as the Government’s backing for expansion of Heathrow, with local councils launching legal proceedings.

In addition, Andrew Tyrie, chair of the Treasury Select Committee, has repeatedly challenged the economic case for expanding the airport. In December, in a letter to chancellor Philip Hammond and transport secretary Chris Grayling, he questioned ministers’ choice of forecasts.

He pointed out that the Treasury had specifically requested that the ‘net public value’ investment measure – the only one to show a strong economic case – be included in a document published to explain the Government’s decision to back Heathrow expansion.

He asked: ‘Can you provide any examples where net public value has previously been used as a measure to assess the cost-benefit case for major infrastructure projects?’

Our connected future

The Government’s approach to digital connectivity also came under the spotlight in December.

Research from regulator Ofcom found that ‘total’ 4G coverage, where a signal is available from all four operators, is available in just 40% of the UK’s landmass, while around one in 20 homes and offices remain unable to sign up for broadband speeds over 10Mbits per second – ‘the speed required to meet a typical household’s digital needs’.

Separately, outgoing National Infrastructure Commission (NIC) chair Lord Adonis said that if the industrial strategy ‘is to mean anything, it must address our connected future’.

His remarks follow comments from the Association of Directors of Environment, Economy, Planning and Transport that the strategy should cover ‘place’ issues that are important to local communities.

In a statement to coincide with an NIC report on telecommunications technology, Lord Adonis took aim at mobile coverage across transport networks, describing poor coverage on the rail network as ‘legendary’.

The report said ministers and Ofcom should ‘no later than 2025’ ensure that services ‘such as basic talk, text and data – are available wherever we live, work and travel’ through a mobile Universal Service Obligation.

The NIC also demanded that the Government ‘must ensure the UK is 5G ready’.

To deliver this it said the railway network must rapidly improve connectivity. It argued: ‘This is best delivered by a trackside network. Government should provide a plan by 2017, and the infrastructure should be in place on key routes by 2025.’

The report also called for motorways to have ‘mobile networks fit for the future’, with infrastructure in place by 2025.

Will devo deliver?

So far devolution could be described as a mitigated success. However the year ended with the potential of the agenda to deliver growth at a local level – which could be a key part of the industrial strategy – coming under the spotlight.

The Commons Public Account Committee said in a report that the Department for Communities and Local Government (DCLG) ‘needs to be clearer about what it is trying to achieve through the devolution agenda’.

It added: ‘If it is not clear to elected representatives, how can it be clear to local citizens and service users who are the ones directly affected by these reforms?’

MPs said the DCLG ‘needs to more demonstrably understand the link between devolution and economic growth’, adding: ‘Devolution is being considered in isolation, with less importance placed on housing, land, education and skills, which play key roles in promoting economic growth.’

The committee reiterated its concerns about scrutiny, transparency and accountability, including the ‘opaque’ nature of accountability for LEPs, which are negotiating local growth deals funded by £12bn over a five-year period.

The comments followed a newspaper investigation that showed apparently lax controls over LEP spending, with officials overseeing hundreds of payments to companies in which they or their colleagues have an interest.

The Daily Mail said that on at least 276 occasions, Growth Deal funding ‘has been used to make payments to the officials themselves, their own companies, or projects they stand to benefit from’. These projects were worth more than £100m.

The paper found ‘extraordinary’ conflicts of interest, including a board boss who saw his own call centre handed a £1m grant and a £60,000 grant intended for local companies that was given to a Saudi chemical giant after its UK boss joined an LEP board.

There appears to be little protection to prevent the officials from using the cash to award grants to themselves, or from making their decisions in secret.

In November the DCLG announced a new National Assurance Framework for LEPs, ‘to reflect current policy and current expectations of LEPs in relation to accountability, transparency and value for money’. However, the document says LEPs will have ‘considerable freedom to determine how to implement the practices and standards’ it contains.

It seems an industrial strategy that covers every angle may be easier promised than delivered.

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