NEW LONDON QUARTERLY: – ISSUE TWENTY-ONE
Investing in our future
Following the publication of the GLA’s London Infrastructure Plan 2050, Clive Dutton and Azhar argue that the UK needs radical structural change if it is to elevate its place in the world
Keith Richards is a national treasure. He’s a Londoner. He is one of the Mayor of London’s all-time heroes.
What’s Keith Richards got to do with an appraisal of the GLA London Infrastructure Plan 2050? Everything.
Like Keith Richards, the UK doesn’t tend to behave like others. It has exceptional talent, liberally doused in idiosyncrasy, but it is impossible to predict what it might do next. With such a national DNA, is delivery of the London Infrastructure Plan 2050 really achievable? Or will it morph into a heady, pragmatic mix of ‘patch and mend’, mixed with the occasional ‘blimey, how did we do that’ blow your socks off moments?
Perhaps we’re incapable of the economic discipline, focus, pragmatism and daring of many other countries. We used to be. If the likelihood of that changing anytime soon is remote, does it really matter? And if not, what should our ‘die in a ditch’ priorities be, if we can’t do everything?
Let’s put things in perspective. It is predicted that Tokyo will be ‘top of the pops’ with 44 million people by 2050. Europe’s most populous nation will be France. Fifteen million people will be living in high density Paris in an area half the size of low density London. London’s population prediction is anything up to 13 million. Even such modest growth scenario in the UK will be contentious.
So, for London, eight big issues will require consideration.
...any future growth strategies for the capital must be set in the economic context of the UK as a whole. This requires a National Economic Plan. Without such a plan, headlining quality of life outcomes means that discussion about long-term infrastructure requirements is fruitless. It is like having some, but not all, pieces of a jigsaw puzzle – but with no picture on the box to guide assembly. Any such plan would need to address:
The future of London as the nation’s greatest economic asset (so obvious but we’re British, so best not to talk about it in case it upsets the neighbours)
A defined economic role for each city region (like Germany, but guaranteed to put the cat among the pigeons here) and
A practical response to those towns and cities that are ‘shrinking’ (in other words finding elegant solutions to parts of the country in economic denial)
Still don’t get it? Think of it as ‘restructuring the nation’.
...long-term political commitment to a National Economic Plan, within which the London Infrastructure would nest, is vital. This means that the nation would need to be convinced that London’s growth would greatly benefit all parts of the UK beyond all other scenarios. It would require a calibre of visionary single-mindedness not seen since Victorian or immediate post-war times to ensure acceptance and speed of delivery. It would also require a radical review of how public involvement is conducted and how the current vice-like grip of convoluted process and litigiousness – often resulting in glacial progress on the simplest projects – is averted.
...the Infrastructure Plan for London will require appropriate pragmatic new governance arrangements to support and deliver it. Options might include:
Reducing the current 32 London boroughs to say, five strategic boroughs. These could be configured on the basis of north, south, east, west and central spatial areas. Imagine the economies of scale. Imagine the turmoil up ahead to achieve such a thing, some say. Incidentally, by comparison, NYC has five boroughs and Beijing 14 Municipal Districts. Related savings brought about by such rationalisation could be ring-fenced and factored into the financing of the Infrastructure Plan
Establishing a new ‘turbo-charged’ London Development Agency – specifically tailored and resourced to oversee delivery of the Infrastructure Plan.
...implementation of the Infrastructure Plan will cost in the region of £1 trillion over the next 36 years. This equates to around £28 billion a year. Because such figures are beyond the realm and reach of traditional funding of public infrastructure projects, radical approaches to funding will be necessary. By way of example, these might include any combination of the following:
- Long-term strategic partnering with another country. For example, Norway has the largest sovereign wealth fund in the world, established by judicious long-term accumulation of its oil, gas and natural resources. Might such an investment partnership be achievable?
- Ring-fencing future UK oil, gas and fracking revenues towards delivery of the Infrastructure Plan
- Big pension funds investment
- Conducting pre-EU referendum negotiations with the European Commission (and the World Bank) on the basis that EU investment in the National Economic Plan – and London’s Infrastructure Plan within it – would provide demonstrable benefit to the long-term economic fortunes of Europe as a whole. It might result in a positive European Referendum outcome – positioning UK as a leader within the EU rather than an outsider.
- Accumulating all assets owned by the public sector based in London for outright sale or leverage with proceeds ring–fenced for delivery of the Infrastructure Plan. A mapping exercise to determine the full extent of public assets and associated value should be independently undertaken, followed by a ‘use it or lose it’ imperative
- Hypothecation of the economic, social and environmental long-term value of implementing the Infrastructure Plan. In other words, putting a monetary value on quality-of-life indicators, the reduction of welfare costs to London and the State and the increased tax and revenues that would be realised over the long term.
...undertake an independent evaluation of the risks and consequences for London and the UK of not implementing the Infrastructure Plan. Such risks will be far reaching. For example, what if in the future, the meridian shifted to a latitude in the Far East?
...social justice should figure highly in the case for the Infrastructure Plan. For example, if, by 2050, life expectancy still diminishes by one year for each tube station travelled from west to east London we won’t have achieved very much.
...is about attitude. International admiration for the ‘UK way’ in the world can no longer be guaranteed. This reduction in respect means that other countries and overseas investors may be less likely to see UK and London as prime places to invest in the future. Increasingly, involvement in international areas of turbulence and conflict is seen to make the UK, and London particularly, more unsafe places to be ... and therefore, to invest.
...the Infrastructure Plan needs a programme of prioritised projects. It should demonstrate ‘what needs to happen by when’, working backwards from the overall target of full implementation in 2050.
Clarity, certainty and consistency are what investors require. The proposals promoted here provide that.
In conclusion, it is a major achievement that the GLA have produced the Infrastructure Plan 2050. However what happens next is the hard part.
For myriad reasons it will be extremely challenging to establish national political consensus as to how infrastructure challenges of such scale and significance are agreed and paid for.
Inertia is a likely scenario. A potential way forward is for the private sector – through a new consortia – to help government navigate this potential ‘minefield’. Perhaps by helping nurture a ‘mindfield’ where a thousand beautiful and exotic infrastructure flowers can bloom – as opposed to a potential process of trepidation and hesitancy.
...the ultimate reality check. While the Infrastructure Plan suggests the future of London, remember – the world does not stand still.
Many global cities are already 30 years ahead in terms of maximising economic growth and advancing the type of infrastructure we can only dream of.
They ‘walk the talk’.
In the UK we tend to just talk. But to the backdrop of a Keith Richards riff.
Keith Richards – a metaphor for the UK, but will the Infrastructure Plan 2050 strike the right note?