Build the rail! Save the snails!
How to really fix UK infrastructure planning
Executive Summary
UK infrastructure projects cost significantly more than European equivalents, and the time and money spent on the pre-construction phase is greater here than in any other country. This is because our system treats projects as "guilty until proven innocent" and provides feedback too late to correct course efficiently. Developers, consultants and planning authorities all respond to uncertainty by over-mitigating potential objections. The cause is not environmental regulation itself, but an adversarial planning system that incentivises pre-emptive risk aversion.
It is a similar phenomenon to that of “defensive medicine”, where a doctor or dentist orders unnecessary tests and treatments in order to manage their own perceived risk of litigation. Each individual precautionary measure might seem justifiable on its own, but in their totality, they add huge expense while making the outcomes no better, or even worse.
The problem is even worse for infrastructure planning in the UK, because the relationship between the risk and the project is driven by strategic behaviour. NIMBY objections may be ostensibly made on environmental grounds, but this does not necessarily mean that removing or reducing habitat protections would get rid of them. The snails and bats are often simply the easiest pretext. Developers are left playing a guessing game, in which they have to make their proposals, and only then see what cards their opponents plan to play against it.
When a project has to be designed based on trying to anticipate what its worst enemies might say about it, we should not be surprised that the process is not efficient. The UK system is not good at neutral inquiry into technical and scientific questions of public benefit. As a common law country, our natural default is to make decisions by adversarial process between interested parties. Our system produces unquantifiable, downside-only risk surfaces that make rational actors overspend in order to avoid tiny probabilities of total project collapse.
This is why the central claim of this paper is that there is something close to a free lunch if we can change the incentives for developers, objectors and the planning authorities. If we can move to a collaborative planning system, the state would be able to inform developers what the most serious objections to their plans are likely to be and how they might best be mitigated or eliminated. This would mean that they could concentrate on innovative and efficient solutions to real problems, rather than gold-plated solutions to hypothetical or cynical pseudo-problems.
In order to achieve this, we would need to redesign the process, so as to give earlier feedback on which issues actually matter. We would need to build shared capacity through industry secondments, and create project-specific teams tasked with solving problems rather than adjudicating them. In fact, this government has already begun taking this kind of approach; the DEFRA Water Delivery Task Force has begun to show successes in breaking down silos and forcing a co-operative approach between water companies, environmental regulators and developers to allow projects to go ahead which had been stuck for years, while potentially improving environmental protection.
Our proposal: reinventing an Infrastructure Directorate
In the fully developed version of our proposed model, the Planning Inspectorate’s infrastructure role is replaced by an Infrastructure Directorate (ID) with a clear, statutory mandate: to get designated nationally significant infrastructure built, quickly, while upholding environmental and heritage protections. It would have much more capacity than the current system allows, financed by an industry levy and making much more use of secondees (from industry and from regulatory and environmental bodies). Its workflow would accompany the project at every stage, rather than being concentrated on a final recommendation. Key aspects of that workflow would include:
Running structured consultations from the initial stage, modelled on the French Conseil National du Débat Publique.
Producing an early Key Issues Report, identifying the most important problems requiring mitigation. But equally importantly, identifying at an early stage that some issues do not need to be considered and others would be weighted against benefits rather than treated as show-stoppers.
Working collaboratively with developers, regulators and consultees (and their professional advisors) through problem solving cycles focused on each major issue in turn. These would be modelled on the DEFRA Water Delivery Task Force.
Producing a final advice for the Secretary of State to give consent, but also an explicit statutory statement of relevance, detailing mitigations which were considered unnecessary and the reasons why.
In this system, judicial review still exists, and claimants can still challenge the Secretary of State’s decision. But the decision record looks very different. Courts are presented with a clear chain of reasoning which shows: that the main environmental and social risks were identified early; that evidence was gathered jointly rather than piecemeal; that alternative mitigations were genuinely explored; and that some objections were explicitly discounted as low-weight or irrelevant. Hopeless judicial reviews are easier to refuse permission for, because the paper trail directly answers the allegation that “X was never considered”. The small number of successful reviews are concentrated on genuinely egregious failures, not on inadvertent blind spots created by silos and late feedback.
As a result, the behaviour of the system is different. Developers no longer have to treat every conceivable objection as potentially fatal, because they know that the Infrastructure Directorate will tell them, relatively early, which issues really can block the scheme and which cannot. Regulators and inspectors have symmetrical career incentives: they are judged both on upholding the law and on getting viable schemes over the line.
Environmental groups and communities have earlier, more meaningful influence on real design decisions, but less leverage to ambush projects late with manufactured problems. The net effect is that pre-construction becomes shorter, cheaper and more predictable, while the underlying level of environmental protection is maintained or improved.
An optimistic future
A full implementation of a European-style corporate model for planning would involve significant institutional change, but the benefits would be great. In the interim, we make some suggestions for changes to the Planning Inspectorate workflow which might have some effect on the flow of information and the balance of incentives; in particular, the innovation of an interim Key Issues Report could be adopted immediately and the use of secondees increased over the next few budget cycles.
There is a genuine free lunch available here, in that we could have largely the same people doing largely the same work for the same money, but by arranging them to work co-operatively rather than adversarially, they could be made to address more of their effort to finding solutions and less to creating problems. We can have the railways, the reservoirs, the bats and the snails, and save money into the bargain.
The UK’s economic model of a neutral and administrative state, with a large professional services sector, is quite unusual globally. It has many strengths. But it is not well adapted to planning and infrastructure, because it creates an adversarial context and incentivises the generation of problems in order to sell the solutions, rather than for any real underlying need. This is why past attempts to improve the system by weakening environmental protections have failed; the output of the “blockers” is limited only by their ingenuity and financial resources, not by the regulations they exploit. The only way for the “builders” to win is to change the game.