Jamie Gordon discusses what the Draft Political Declaration means for UK infrastructure
The draft political declaration on the future relationship between the EU and the UK, after Brexit, is finally out. All very exciting stuff.
Well, not really. Firstly, it’s not a legally binding document and, from an infrastructure point of view, it didn’t contain any real surprises.
Yes, it’s good to know that we’re not throwing the baby out with the bathwater and that any ‘future relationship should include a wide-ranging Nuclear Cooperation Agreement between the UK and the European Atomic Energy Community (EURATOM)’ but did anyone really think that, despite the original knee-jerk claims, common sense would not prevail on that one. Elementary, my dear Watson.
And equally, it doesn’t require the deductive power of Sherlock Holmes to realise that ‘the Parties should cooperate to support the delivery of cost efficient, clean and secure supplies of electricity and gas, based on competitive markets and non-discriminatory access to networks.’ Hardly shocking news there either.
Puns aside, the declaration didn’t generate any headlines with regards to infrastructure. So, does that mean Brexit will have no effect on the UK’s ability to invest and build the high-quality roads, rail, power stations and other infrastructure projects we urgently require to be competitive?
Unfortunately, it doesn’t because there are many pieces of EU legislation that affect the infrastructure sector. Admittedly we’ve been told that the majority, especially environmental ones, will be carried over to the UK statute, but that doesn’t automatically cover all aspects.
Let’s take social values as an example. The quantification of social values has been a long- time holy grail for everyone from transport planners to healthcare executives. In the absence of a crystal ball, no methodology can ever predict the full impacts, positive or otherwise, a change will have on a society.
But, by looking at factors such as social mobility, climate change and wealth inequality, many modern solutions do their best to at least try and achieve a deeper understanding.
Within the infrastructure sector, some of the need for this more in- depth knowledge of social impacts was driven by the fact many projects received part funding from the EU.
Now, don’t worry, I’m not going to start on a Remain campaign by saying what are we going to do without that cash. But one thing the EU was good at was prioritising their spending. With 28 members crying out for funding, from new tramlines in Romania to HS2 in the UK, the Commission had to develop a pretty thorough Benefit Cost Ratio (BCR) model that looked at a range of values across varying societies. So, if you wanted EU funding you needed to do your sums.
In the UK we really only have two central government guidelines that try and drive some sort of measurement on social value. One is the Green Book, an economic modeller’s dream, and the other is the Public Services (Social Value) Act 2012 which is also an economic modeller’s dream but with a bit more about recruitment and training. And there is no evidence to say that these guidelines won’t be all we are left with as central reference in a post Brexit UK.
So, what now is going to drive the need for social values modellers to continue their good work above just calculating that a rather obvious investment here gives a direct return on investment there?
Well hopefully our conscience will come into play, coupled with an understanding that high social value schemes have a greater chance of success. Such schemes’ needs cases aren’t just measured in pound signs but in factors that are more tangible to the societies they impact. So instead of talking about generating more jobs in the future you have data that allows you to talk about improved access to existing jobs.
And because such schemes can be supported by such messages, the whole positioning changes. The type of impacts being discussed are ones we and the affected community want to maximise, not minimise.
And with this comes a greater societal acceptance, which in turn, means a scheme is far more likely to receive political consent and funding.
In summary, yes there is a risk to the infrastructure sector from Brexit, but it’s not one we can’t manage, as long as we are willing to carry on the good work and continue to get a bit closer to that holy grail of a perfect social values metrics.
Jamie Gordon is the Head of Infrastructure and Energy at BECG.
If you would like to know more about how BECG could help communicate the benefits of your scheme, call 020 3697 7630.