ICE finds £8bn hole

A report by the

(ICE) claims the

lost £1.8bn in 2007 due to a stop/start approach to planning essential infrastructure projects, and could be losing £8bn by 2015.

The ICE’s State of the Nation Report on Capacity and Skills, said that uncoordinated planning is discouraging industry investment. A failure to take into account rising construction inflation, as demand for construction increases ahead of capacity, could also leave a £8bn ‘hole’ in investment for infrastructure.

According to the report construction inflation has been running at a rate well above the consumer price index, the measure used by the government to calculate overall inflation and to determine future spending plans. If left unchecked ICE believe this gap will continue to grow and leave many vital projects at risk.

‘The UK civil engineering industry is facing a capacity and skills crisis due to a boom in infrastructure investment,’ said Keith Miller, from ICE. ‘If the costs of delivering vital water, energy, waste and transport infrastructure rise, essential projects could be scrapped leaving the public at a loss.’

The report claims a fractured approach to infrastructure planning erodes the industry’s confidence to invest in developing capacity, innovation and civil engineering skills. This leads to higher construction inflation, and misses an opportunity to get best value at a time of increasing global demand for resources.

In its report, ICE calls for an independent commission to take a strategic overview of all major infrastructure projects and coordinate their delivery.

ICE’s research also highlights that the UK is experiencing a skills gap. The industry will need up to 12,300 new senior construction professionals to join each year, until 2011, if it is to meet demand for major projects.