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Investment & Performance Board (IPB)
Date of meeting:
24 July 2014
Title of paper:
Infrastructure Investment Plan
To be presented by:
Jeremy Skinner, Senior Manager – Growth and
Enterprise, Economy and Business Policy Unit
Cleared by: (name
Adviser & Director)
Fiona Fletcher-Smith, Executive Director –
Development, Enterprise and Environment and
Isabel Dedring, Deputy Mayor for Transport
Classification:
Public
1
Executive Summary
1.1
The consultation report for the Long Term Infrastructure Investment Plan
for London is due to be published on 30 July 2014. It will set out London’s
strategic infrastructure requirements to 2050, across the main aspects of
infrastructure (transport, green, digital, energy, water and waste), the
magnitude of cost involved and funding and finance options. The
consultation will run for three months and a final report is planned for early
2015.
1.2
The IPB has previously approved expenditure of £382,000 for this piece of
work; with £373,000 incurring in 2014/15 and budget of £182,000
allocated from the 2014/15 central programme budget. This paper provides
an update on the spend incurred to date, the likely spend going forward and
additional resources required.
2
Recommendations
2.1
That the Board:
a) Notes the spend incurred to date;
b) Endorses the proposal for the remaining resources to be allocated to
deliver the Long Term Infrastructure Investment Plan for London; and
c) Approves in principle an additional budget and expenditure of
£281,000, for consultancy input and analysis in 2014/15 funded from
the Central Programme Budget
3
Introduction and Background
3.1
In July last year, the Mayor commissioned work to create the capital’s first
Long Term Infrastructure Investment Plan, to ensure London has the
infrastructure needed to remain one of the best cities in the world to live,
work and do business in.
3.2
This follows on from both the London Finance Commission (LFC) report
and the Mayor’s Vision 2020. The LFC recommended devolution of
property taxes to London. The LFC also recommended that a long term
infrastructure investment plan for the city should be produced, identifying
the absence of such a plan as a clear gap in the Mayor’s ability to secure the
requisite funding. The Mayor’s Vision 2020 document made a broad outline
of London’s infrastructure needs in the years to 2020, and committed to
producing a longer term Infrastructure Investment Plan.
3.3
We are now ready to publish a consultation report and supporting analysis
at the end of July. This will set out London’s strategic infrastructure
requirements to 2050 across transport, green, digital, energy, water and
waste; the estimated costs, funding and financing options. Extensive
consultation will take place during the Autumn, with infrastructure
providers, investors, businesses, Government, the Core Cities, academics
and Londoners. We then plan to publish a final report early next year.
3.4
Most of the work to produce the Infrastructure Investment Plan has and
will continue to be conducted in-house. However, given the range of
expertise required it has been necessary to procure consultancy input,
establish an external advisory group and actively engage stakeholders.
4
Issues for Consideration: Project Update
4.1
As expected, the majority of the costs incurred have been to ensure we have
the full range of expertise through procuring consultancy support; as well
as ensuring wide spread buy-in through effective stakeholder engagement.
Consultancy support
4.2
We have procured Arup to model the full costs associated with delivering
London’s total infrastructure requirements. The contract ran from
February to April at a cost of £170,000 plus VAT. This was competitively
procured through the TfL Financial Services Framework and is now
complete.
4.3
This element of the project has been a complex task that required extensive
modelling, close working with GLA, TfL and others, along with extensive
scrutiny from a variety of sources. It has required greater input than we
first anticipated. We have extended Arup’s contract to provide additional
analysis to support the costs aspects of the projects and provide further
advice to inform the work on how we might fund and finance London’s
infrastructure needs, this was at a cost of £95,000 plus VAT. This piece of
work will be complete by the end of July.
4.4
The additional expertise provided has been critical to the delivery of the
consultation report and the external perspective has provided a useful
challenge to our thinking. Going forward we are likely to need further
consultancy input to provide support on a range of issues that need further
work in advance of the final report. This will to some extent depend on
responses to the consultation, but may include:
 Refresh of the cost model to reflect changed proposals following
consultation
 Appraisal of the funding and finance options presented in the
consultation report
 Assessment of the economic impact of the programme of work proposed
in the infrastructure plan.
4.5
Additional analysis will also be required on more specific questions that will
need to be considered over the consultation period, these include:
 Infrastructure implications of 5G
 Skills requirements and action plan to deliver the Infrastructure Plan
 Assessment of the impacts of the infrastructure plan on economic
growth
 Sequencing principles to apply to delivery of the infrastructure plan
We may be able to commission these on a pro bono basis, but a spend of up
to £10,000 may be necessary.
4.6
Stakeholder engagement
As we have developed the work, we have consulted extensively with
stakeholders to gain insight and alternative view points as well as to ensure
buy-in. This has been done through large scale stakeholder events at City
Hall, roundtable discussions with key groups, and a number of bi-lateral
discussions.
4.7
The majority of this engagement has been at little or no cost. We have held
two large scale events at City Hall, at a total cost of around £10,000. The
first was an ‘Infrastructure at 2050’ debate, which took place in the
Chamber in October, with external speakers and a Panel discussion. This
successfully kicked off our public engagement and provided useful input and
ideas to expand on. We then held a day long event in the London Living
Room in December, comprising all attendee presentations on our emerging
recommendations, followed by themed workshops. This will allowed us to
engage the full scale of stakeholders in one go and enabled cross interest
discussion.
4.8
During the consultation period we plan to hold a variety of events, with our
full range of stakeholders. Examples of the events planned are:
 Roundtable discussions with CECA, ICE and other bodies representing
infrastructure providers.
 Sustainability Exchange organised workshops with leading thinkers
and the public on key themes.
 Seminar on the skills and training requirements to deliver the
Infrastructure Investment Plan.
4.9
Londoners will be a key group to engage in the next stage of the work. To
start this, alongside the consultation report we are publishing a public facing
slide pack. Through TfL we have procured graphic designers to pull this
together. TfL have budget secured for this, it is likely the costs will run
slightly over, and we may need to contribute in the order of £10,000.
External Advisory Group
4.10
We have established an External Advisory Group to provide additional
guidance and input to the project. The Group has met regularly and has
proved a valuable source of expertise and contacts. Costs have been limited
to travel expenses and catering at meetings.
Cost incurred and planned spending
4.11
The tables below show how these costs compare to the budget allocated by
IPB. Over the next year we are likely to require around £90,000 additional
budget, mostly as a contingency for additional consultancy input.
Table 1: Spend to date 2013/14
Cost
Consultation events
Catering
Total expenditure
Total Budget
£10,000
£1,000
£11,000
£11,000
Table 2: Incurred and planned spending 2014/15
Cost
Arup – costs
Arup – follow up on funding and finance
Graphic design
Consultation events – workshops and public
involvement
Follow up analysis
Contingency – consultancy support
Total expenditure
Approved Budget Allocation
Additional budget required
Total budget
£191,000
£112,000
£10,000
£40,000
£10,000
£100,000
£463,000
£182,000
£281,000
£463,000
5
Key Risks and Issues
5.1
Given the high profile nature of the project and its importance in arguing for
the investment needed to support London’s infrastructure, it carries
significant risks. The main risks are that the report is not considered
credible and does not have buy-in and support from key stakeholders.
5.2
Accordingly, stakeholder engagement has featured heavily throughout the
project. Through a variety of routes – the events and meetings outlined
above and a call for evidence – and with a wide range of organisations and
individuals. There is wide spread support for the project and the proposals
have been tested with stakeholders and are generally supported.
5.3
During the consultation, an even greater emphasis will be put on stakeholder
engagement – through a greater variety of routes and with a more diverse
range of organisations and individuals.
5.4
The main risks are outlined in the table below.
1
Risk description
Mitigation / Risk response
Probability
Impact
Central Government
rejects
recommendations
We have been in discussions with HMT on
the LFC recommendations and the
Infrastructure Investment Plan. They are
open to considering some form of fiscal
devolution and understand the need for
infrastructure planning.
MEDIUM
HIGH
We are working with Infrastructure UK.
They are on our External Advisory Group.
3
5
Does not receive buy in
from infrastructure
suppliers
Engagement to date has indicated wide
spread support for the need for a long term
infrastructure investment plan for London;
as well as for our approach and the
proposals.
MEDIUM
HIGH
Consultation responses
are not adequately
reflected in the final
report.
We will put through plans in place to
consult with a wide range of stakeholders.
LOW
MEDIU
M
LOW
MEDIU
M
Timescales are not met
We will be systems in place to document
and regularly monitor responses.
We are on track to publish at the end of
July.
Governance structures are in place to
monitor progress through to the final
report
6
Financial comments of the Executive Director Resources
6.1
This report requests approval for an additional budget allocation of
£281,000 from the Central Programme Budget to resource the work
required to complete the Long Term Investment Infrastructure Plan in
2014/15. It is to be noted however that this would result in the
Development, Enterprise and Environment Directorate exceeding the
notional Central Programme Budget allocation for 2014/15.
7
Next steps
7.1
We will publish the consultation report on 30 July, before starting a period of
extensive consultation. We putting are together a consultation plan,
including the exact timing and details for the planned events and meetings.
Responses to the consultation will at least to some extent determine the next
steps thereafter. We currently plan to commission the additional analysis
outlined above with a view to publishing a final report early next year.
7.2
The IPB should also note that the above programme will conclude this
project. However, the some of the proposals contained will have budgetary
implications.
7.3
In particular we plan to establish a ‘London Infrastructure Delivery Board’.
A key theme throughout the work has been the need to join up delivery to
reduce costs and allow faster, more innovative delivery. A Delivery Board
chaired by the Mayor and composed of London’s key infrastructure providers
is the proposed mechanism to enable this. The Board will be established and
hold its first meeting by the end of the year. It will require some budget to
support its work.
7.4
The Infrastructure Investment Plan also proposes a Green Infrastructure
Task Force to advise the Mayor on options for governance and funding a
more co-ordinated London wide approach to green infrastructure. The Task
Force will be established by the end of the year and will report at the end of
2015. It will require some budget to support its work.
7.5
We will return to the IPB in the Autumn with more detail on how the Board
and Task Force will work and its budgetary requirements.
Activity
Any subsequent approvals i.e. MD or DD [if applicable]
Procurement of contract [for externally delivered projects]
Announcement [if applicable]
Delivery Start Date [for project proposals]
Final evaluation start and finish - self
Delivery End Date [for project proposals]
Project Closure: [for project proposals]
Appendices
None
Timeline
DD to be
signed July
2014
From August
2014
Early – Mid
2015
Early 2015
Early 2015