Yorkshire taxpayers could face an unexpected bill of around £575m every year from 2030 due to poorly planned and procured infrastructure projects, according to a new report.
Research by construction group Mace shows that the UK currently has an infrastructure pipeline of £600bn with a predicted annual spend of £65bn a year by 2030.
However, up to 80 per cent of large infrastructure projects are delivered late and over budget, it said.
The report found that if major projects continue to experience issues at the rate they do now, tax-payers in Yorkshire will face an unexpected bill of around £575m a year, equivalent to £600 per person.
The new Mace Insights report released today looks at the main reasons why so many large projects go wrong and what the Government and project teams can do to put it right.
Nearly 40 senior executives from around the world were interviewed for the report alongside a review of the latest academic literature and new modelling.
Mace’s international team has helped deliver projects including a new marine centre in Grimsby and a new wind turbine facility in Hull, as well as the London 2012 Olympic and Paralympic Games.
Lisa Bowden, head of infrastructure in the North at Mace, said: “Good infrastructure is absolutely fundamental to the North’s future and a key part of rebalancing the UK’s economy and creating the Northern Powerhouse as we leave the European Union.
“With the success of devolving powers to our city regions and the recent publication of Transport for the North’s powerful strategic transport plan, there has never been a more exciting time to unlock decades of under investment in infrastructure across the North and learn best-practice lessons from around the world.
“However, unless we take serious measures to improve the planning and delivery of large-scale projects, taxpayers in Yorkshire and the Humber could face an unexpected bill of £575m a year due to project delays, poor procurement and cost overruns.”
Some of the main issues identified include lack of clarity of outcome when deciding on which schemes to take forward. Often decisions are driven by political pressure.
Secondly, the poor predictive abilities of project teams in their early stages, who are pressured into providing price estimates and programmes well before accurate predictions are possible or realistic.
Thirdly, procurements based on ‘cheapest price’ to fit within unrealistic initial budgets.
Mace wants the Government to create a UK Department for Growth to bring together the disparate elements of infrastructure to speed up the delivery of major schemes.
It also calls for a ‘heavyweight’ independent scrutiny panel whose sole job it is to play ‘devil’s advocate’ and challenge project costs, approaches and timetables. It said this approach was successfully taken on the London 2012 Olympic Games.
In addition, the group wants the exit from the EU to revolutionise UK public sector procurement, which is bound by rules stemming from EU directives.