Sir John Armitt has a lifetime of experience in delivering big projects, including West Coast Main Line and the London Olympics
As Boris Johnson’s government settles into Downing Street, we can expect to hear a great deal more about big infrastructure.
The new Prime Minister may have been a proponent of the cancelled Garden Bridge across the Thames, but he has never been an enthusiast for HS2 or a third runway at Heathrow.
Before Boris makes any premature decisions to cancel HS2 – the high-speed rail link connecting London to Manchester and Leeds via Birmingham – he could do worse than have a chat with Sir John Armitt, the 73-year-old chairman of the National Infrastructure Commission.
Sir John has a lifetime of experience in delivering big projects, including West Coast Main Line and the London Olympics – which Johnson likes to claim as his own.
‘There is bound to be resistance,’ says Armitt. ‘You inevitably have opposition [to HS2] in the built-up areas around Camden in London, from the disruption, and people in the Chilterns.
‘But when you talk to the people who are going to get the connectivity and you look at the centre of Birmingham, with the massive redevelopment that is taking place, undoubtedly on the back of optimism about HS2 and the desire of the cities of the North, you find the majority of the people who will be affected by and benefit from it will support it.’
In spite of the political and media effort to dismiss HS2 as a vanity project and to suggest the money could be better spent on commuter routes in the North and the national need for better dementia care, the economic case is overwhelming.
Projects such as HS2 not only provide tens of thousands of jobs but can also help to resolve the regional income imbalance between the wealthy South East and the ambition of aspirational cities further north.
Johnson’s initial quest to tarnish the case for HS2 by asking the project’s chairman Allan Cook to conduct a review looked to hit pay dirt last weekend when a leaked letter warned the Department For Transport that it couldn’t be delivered within its £56billion budget.
Threat: Britain’s new Prime Minister Boris Johnson has never been an enthusiast for HS2 – the high-speed rail link connecting London to Manchester and Leeds via Birmingham
Some reports suggested that as much as £30billion extra might be required.
Armitt is dismissive. ‘When we did the upgrade on the West Coast Main Line at Network Rail it was going to be £12billion. We said we could afford eight. We sat down with the contractors – and it cost £8.3billion.’
The departing Chancellor of the Exchequer, Philip Hammond, has claimed that one of the obstacles to doing infrastructure quicker is capacity. There is, in his view, a lack of capable engineers and construction firms to get the work done.
But Armitt notes that many of the contracts are jointly run between UK and European firms, and there is spare capacity on the Continent. If there is an obstacle it is the Treasury and the Government balance sheet.
‘Infrastructure is fundamentally debt on the balance sheet,’ Armitt observes. ‘The way the Government finances work, it is difficult to underwrite or guarantee projects.
‘As soon as the Government says they are going to underwrite something, someone says it is a contingent liability and it goes on the books.’
There are more creative ways of doing things, as has been seen with the ‘Super Sewer’ in London. Thames Water has been allowed to put a value on what is being built, and offer a return during construction.
But that has proved highly controversial and a gift to Labour, which wants to take water into public ownership.
Jeremy Corbyn and his team believe it is wrong that consumers pay extra to fund dividends which flow overseas to owners such as sovereign wealth funds.
Even so, if the Government wanted to be bold Armitt thinks it is a model which could work, especially for assets owned by UK financial institutions such as pension funds.
An engineer, who is the product of Portsmouth College of Technology, Armitt should know what he is talking about.
He has held almost every job in UK construction and infrastructure, from chairman of J Laing International to Network Rail and chairman of the Olympic Delivery Authority.
If Boris Johnson is really interested in getting behind infrastructure, he could do worse than take on this sure-footed veteran of Britain’s engineering and infrastructure wars.