In profile: Sir John Armitt, Chair, National Infrastructure Commission

A civil engineer by training, Armitt spent the first 27 years of his career at John Laing Group, an investor, developer and operator of public road and rail infrastructure, where his last major transport project was the completion of the second Severn Crossing.

In the early 1990s he was tempted into the public sector by the opportunity to oversee the construction of the High Speed One (HS1) Channel Tunnel rail link, giving the UK a physical link to the Continent for the first time.

“I was CEO of Union Railways, as it was then called, for four or five years until we got the route approved and got it into construction,” he said.

Following a return to the private sector by heading up Costain Group, he was appointed as CEO of Railtrack in 2001, then in administration, which later became Network Rail. It was a position he was to hold for six years.

INFRASTRUCTURE INSIGHTS

What did Armitt’s six-year stint at Network Rail teach him about the role that freight plays within the UK’s rail infrastructure?

During his time at HS1, he recalls that the attitude prevalent among rail engineers was that as a passenger railway they didn’t want freight trains anywhere near it. Later, when he headed up Network Rail, the passenger invariably came first, with the needs of freight trailing a distant second.

“In Network Rail inevitably the consumer, the passenger tends to come first not the railways,” he said, “So the poor old freight trains are literally shunted into the sidings and wait for the passenger trains to go by or only become active at night.”

Ideally the UK would have separate freight and passenger rail networks, Armitt argued. He also maintained that High Speed Two will help free up capacity for freight paths on the West Coast Main Line.

“You can have a cheaper passenger railway on the existing line, and you’ll probably have a more expensive one on High Speed Two,” he said, “But one of the key things is that it frees up capacity for those domestic services on the lines into London and frees up more capacity for the freight railway.”

DELIVERING THE LONDON OLYMPICS

If there was a single point during Armitt’s career to date which highlighted the valuable role that rail freight can play, it was arguably during his time chairing the Olympic Delivery Authority between 2007 and 2014, to prepare the capital for the 2012 Olympics.

“We literally created a rail junction on the site, so that we could deliver as much as possible by rail,” he said, “If you’re building something like that near the centre of London at Stratford then there’s a lot of pressure to try and keep lorries off the road. So, all our heavy materials literally came in by rail to a specific freight terminal which was built on site.”

HELPING SHAPE NATIONAL INFRASTRUCTURE

Armitt currently chairs the National Infrastructure Commission (NIC), whose remit every five years is to look forward 25 to 30 years and make recommendations to government about the infrastructure improvements and changes that the UK needs to make across its economic infrastructure – including the transport, energy, water, waste and telecommunications sectors.

“We say to government that these are the things which you need to be planning for and putting in place, by either you the government or the private sector utility companies,” he said, “so that we’re able and ready to provide the infrastructure that our society’s going to need, that our economy is going to need in 25 to 30 years’ time.”

The NIC is also obliged every year to “mark the government’s homework”, by assessing the progress it is making on the policies the government has set out to deliver the NIC’s recommendations.

“Is it making the progress that we would expect?” Armitt asked, “Is it ahead or is it behind and is it committing sufficient resources?”

In between times, the Commission is also asked to undertake specific pieces of work on particular subject areas, which may last six months, and lead to reports that include recommendations.

Having published a lot of reports over the last seven years, the NIC is currently in the final stages of its second 25-30 year look ahead, called NIA2, which is scheduled to be published in the autumn. One area it will be focusing on is inter-urban transport – its challenges and requirements, particularly from a freight perspective.

“What are the improvements that are necessary to ensure that we can reduce the carbon footprint of freight,” Armitt said, “whilst at the same time ensure that we have sufficient capacity to deliver what is an increasing volume of freight, particularly post-COVID?”

RECOGNITION FOR LOGISTICS

As someone who is involved in making recommendations to government on long-term infrastructure, does Armitt believe that freight and logistics are sufficiently recognised in policy and investment planning decisions?

“I think the government does recognise that there is a demand,” he said, “We produced a specific freight report a couple of years ago now, which the government broadly accepted.”

Focusing particularly on the decarbonisation aspect, the NIC freight report highlighted the need to effectively ban diesel HGVs by 2040 and electrify large parts of the rail network – a recommendation which carries significant cost implications.

“I think the challenge for government is that none of this comes cheap. And of course what we’re seeing at the moment in the highways programme is that a number of projects have been delayed, so that’s going to reduce the amount of money available for new projects in RIS3.”

Armitt argued that delays risk road projects specified in the government’s Road Investment Strategy 2 (RIS2), which covers 2020 to 2025, being rolled over to RIS3, which covers 2025 to 2030. This will inevitably make it more difficult to bring in new projects in RIS3. 

TRANSPORT INVESTMENTS DEFERRED

On a recent site visit to the Lower Thames Crossing, Armitt was struck by the large volume of HGVs using the Dartford crossing.

“The sheer volume of traffic going through the tunnels and over the bridge at Dartford was quite staggering,” he said, “So the need for that Lower Thames Crossing is clearly enormous. It’s therefore disappointing to see the government push that back by a couple of years on its delivery date.”

The day after his site visit, the Transport Secretary Mark Harper MP confirmed that HS2 will be delayed by another two years and the construction of major roadbuilding schemes, including the Lower Thames Crossing, will also be “rephased”. What is Armitt’s view on these delays, and does he think they can be avoided?

“It’s a strange one, because it’s not going to reduce the cost of HS2,” he said, “In fact it will probably up the overall budget because delay causes extra cost, so it’s a cash flow improvement for government. It probably keeps the OBR happy because it reduces the debt by a little bit but it's not an enormous amount of money, and it seems to me to send all the wrong signals to investors.”

CONGESTION TOPS ROUNDTABLE AGENDA

Armitt recently attended a Logistics UK members’ roundtable on infrastructure at the business group’s London office. What did he take away from that discussion?

Telling members that the NIC study was looking at all the parts of the road network which were not working as effectively in his study, he asked them: ‘Where are the big pinch points from your perspective?’”

Despite there being many congestion points across the network, Armitt concedes that there isn’t likely to be enough money available to improve all of them.

“Everybody wants everything. There never is enough money for everything and so you have to make some hard choices,” he said.

Also discussed at the roundtable were key road and rail performance issues.

“There’s two things which need to be addressed,” he said, “One is how do you reduce congestion and therefore how do you make a delivery, whether you’re delivering a passenger or whether you’re delivering a cardboard box or a new car? How do you make those more reliable?”

The other key performance is how to reduce the transport system’s carbon emissions. While he acknowledges that hydrogen trains and HGVs may have a role to play, Armitt believes that majority of the solution will lie in the delivery of electrification. This raises the spectre of the UK’s electric vehicle charging infrastructure, still regarded by many commentators as woefully insufficient.

“Do we have the right distribution networks to ensure there’s sufficient power at the charge points?”, he said, “We need to install fast charge points to enable freight operators to get their vehicles charged up sufficiently quickly for long-distance operations.”

BARRIERS TO DECARBONISATION

When it comes to logistics operators looking to decarbonise their businesses, Armitt argued that one of the largest barriers is a lack of certainty around government policy. Will they need a hydrogen fuel supply system or charge points where they can refuel their electric trucks in the future?

“Inevitably what they’re looking for is more certainty around government policy,” he said, “More certainty around what the future is going to be so that they themselves can understand what their future programme is likely to be over that time scale. A lot of this needs to happen by 2035, if we’re going to meet carbon budget six.”

The challenge for government, Armitt argued, was to pull together more certainty around policy at a time when many of the emerging technologies are still uncertain.

Does he believe it is the government’s role to pick winners – say electric vehicles and infrastructure over hydrogen vehicles and infrastructure – or should it be left to the market to decide?

Citing the level of support given by the US government to invest in new technologies, and the support the European Commission is seeking to give, he said: “They are clearly of the view that the changes necessary are not going to be met by market forces alone.”

Commenting on a view recently expressed in the FT that failing US banks should be left to go bust, he said: “I think in today’s world that is probably unrealistic. We’re only going to address these big problems by collaboration between the private sector and government.”

Alluding to the recent news story that Jaguar Land Rover’s owner Tata has reportedly sought a £500m subsidy from the UK government to build a battery factory in Somerset, he argued that the business needs some support from the government to help pay for that investment, which has a risk greater than it is willing to bear on its own.

“I think government has to be prepared to make some big decisions, some bold decisions and has to be prepared to get some of them wrong,” Armitt said, “They don’t like doing that.”

Making hard choices is imperative, he stressed, particularly in an environment where economic growth is slowing down.

“If we’re determined to actually meet these net zero targets, then we’re not going to meet them if we just continue to put off making difficult decisions.”

INFLATIONARY PRESSURES

Now that soaring inflation is adding billions to the cost of transport infrastructure, does Armitt expect a decade of slower progress on national projects?

The background noise suggests that construction inflation is slowing down, he said.

“I’ve heard people in the industry talk about labour cost inflation slowing down. Material cost inflation is starting to slow. So as long as the worldwide price of oil and gas continues to fall back, which it is at the moment, then the pressures on the material content that goes into construction projects should start to ease.”

The Bank of England has said it expects inflation to fall from the middle of this year to around 4% by the end of the year, and last month it raised its base interest rate to 4%. Meanwhile a big bank has forecast that the unemployment rate will be around 4% by the end of the year.

“The challenge always for engineers and for construction companies is to try and keep on top of these costs,” Armitt said, “Government’s role is to keep the pressure on to keep those costs down without at the same time reducing the scope of works and reducing the amount of investment that goes in.”

The Transport Secretary’s recent statement on delaying HS2 and the Lower Thames Crossing shows that the government recognises that it faces financial challenges in all directions, Armitt said.

“But there’s no doubt that we need to see this continued investment in infrastructure across many sectors. These investments are necessary.”

In the final analysis, Armitt argued that it is the UK electorate who will have the power to decide: “We want to see an increased quality of life, we want to see things work better and we want better services. Well, the only people who pay for them at the end of the day is us. We either pay through taxation or we pay as a consumer at the point of use.”

Concluding, Armitt returned to the pressing need to take some tough decisions on infrastructure investment.

“Government clearly has to make those choices and it has to be honest with us about what the costs will be. If we’re going to have these improvements in performance, if we’re going to see decongestion, if we’re going to see cleaner air, if we’re going to see more reliable systems, then it comes at a price and we all have a part to play in that.”

*www.nic.org.uk

Published On: 23/03/2023 16:00:15

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