Mayor of London issues stark wake-up call on capital’s infrastructure requirements

30 July 2014

London is set to exceed its record level of population within months and risks losing its position among the world’s elite cities unless a major programme of infrastructure investment is put in place to allow the capital to continue to operate efficiently and successfully. That is the verdict of the Mayor who launched a consultation on a 2050 London Infrastructure Plan today (30 July).

The London Infrastructure Plan 2050 is the first attempt to set out the full range of infrastructure requirements for the capital over the next half century, during which time the population of London is forecast to increase by thirty seven per cent to more than 11 million people. The Mayor wants to consult with Londoners, national Government, the wider southeast and beyond on the plan, which he describes as a wakeup call to the stark level of investment and thought that needs to be put into ensuring the capital does not falter.

The plan builds on the Mayor’s campaign for greater fiscal devolution to cities, which has brought together London’s government and the Core Cities Group – representing Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield - to jointly make the case for devolving locally-raised taxes to cities, allowing for investment in much-needed local infrastructure and boosting the whole of the UK’s economy. The Mayor believes that model for investment set out in the plan could also be suitable for all of these cities, and others, providing a blueprint for how they might invest in locally-decided priority infrastructure needs.

Although London currently leads the world in the finance, commercial, cultural, scientific and media sectors the capital is in danger of being overtaken by competitors who are already strengthening their infrastructure. The Mayor argues that a clear economic rationale underpins the need for a long term infrastructure plan, as rising prosperity for all depends on increased productivity, which itself relies on good infrastructure. However, infrastructure can only be delivered, improved and maintained through planned, sustained and targeted investment.

The Mayor of London, Boris Johnson, said: “This plan is a real wake up call to the stark needs that face London over the next half century. Infrastructure underpins everything we do and we all use it every day. Without a long term plan for investment and the political will to implement it this city will falter. Londoners need to know they will get the homes, water, energy, schools, transport, digital connectivity and better quality of life that they expect.”

If London’s population increases as forecast the plan explains how the city will be faced by a series of serious challenges to its infrastructure:

  • Demand for public transport is forecast to increase by 50 per cent with increased demand for Underground and rail services likely to increase by 60 and 80 per cent respectively.
  • Demand on energy supplies is set to increase by 20 per cent during a period where demand on electricity supplies is forecast to more than double.
  • Thames Water projects demand for water will exceed supply by 10 per cent in London by 2025, rising to 21 per cent by 2040.
  • With an increasing school age population more than 600 new schools and colleges need to be provided.
  • To meet the demand for housing around 50,000 new homes a year must be provided.
  • With Heathrow already operating at 98.5 per cent of its capacity, a new four runway hub airport in the Thames estuary must be provided to meet London’s wider social and economic needs.

The Mayor will establish a London Infrastructure Delivery Board composed of senior representatives from all of the main infrastructure providers in London to utilise their expertise. The draft plan sets out detailed descriptions of how the challenges facing London might be met. They include:

  • Plans to improve transportation by maximising and extending Tube services. Crossrail 2 must be approved and further Crossrail projects may be required. Working with Network Rail, there is also huge opportunity to double capacity on the capital’s rail network. A series of new river crossings are needed and an inner orbital road tunnel should be built. A new four runway hub airport should be located in the Thames estuary, to the east of the capital.
  • Green infrastructure needs to become considered as much a part of the city’s vital systems as our other utilities. An extra 9000ha of accessible green space needs to be provided in both traditional and new ways. Green spaces need to be better planned, designed and managed to deliver benefits including more space for walking and cycling, flood mitigation, improved air quality, enhanced biodiversity and a cooler urban environment. 
  • With Broadband now considered the fourth utility the Mayor wants to see greater action taken to raise the UK and London’s connectivity to world class levels. He recommends working with the telecoms industry on a city wide connectivity mapping exercise that would be used to develop property connectivity ratings. A connectivity advisory group will be established and they will consider measures including opening up access points such as bus stops and street lights for digital providers and bringing planning applications for communications infrastructure within the Mayor’s responsibility.
  • With energy demands at risk of outstripping supply and key developments such as those at Nine Elms at risk of delay as a result, the Mayor argues a strong long term plan to use energy more efficiently and bring in new capacity where we can is vital. A short term investment of £210m on electricity substations is required but in the long term changes to the regulatory regime must be considered as well as plans to supply a quarter of London’s energy from local sources and exploit the capital’s waste heat resource.
  • A more integrated approach to water management would help deal with demand for water which is predicted to exceed supply from as early as 2016. The plan outlines how innovative tariffs and better leakage detection could help plug the gap. He also encourages Thames Water to develop 25 year plans for wastewater, drainage and flood risk management.
  • The Infrastructure plan also outlines plans to deal with waste by moving to a circular economy where goods are designed to be reused and recycled. Many of the world’s largest companies including Renault, Vodafone and Philips are already making the shift to that form of thinking. But by 2050 it is the Mayor’s aim that very little waste will require disposal, which would result in £5 billion of savings from 2016 to 2050.

The London Infrastructure Plan 2050 also discusses how growth might be accommodated in the capital. The plan suggests improving rail links to other urban areas in the southeast but the Mayor rules out building on the green belt as the large amounts of brownfield land within the capital should allow London to accommodate its growth, at least until 2025, within existing boundaries.

The full costs of delivering and maintaining the infrastructure London requires would result in a sharp rise in costs and a public sector funding gap. Arup estimate that the total investment in London’s infrastructure between 2016 and 2050 could amount to £1.3 trillion, although the purpose of consulting on this plan is to help agree priorities and how to reduce costs. Capital costs would rise significantly compared to existing funding levels and the Infrastructure Plan examines a number of ways of plugging the gap.

Fiscal devolution is vital and would give the city greater financial control over its transport, housing and other investments, and provide a base against which to borrow prudently. Public sector land and other assets could also be utilised more intensively, effectively and efficiently. Combined with better integration and procurement, costs could be reduced by up to £100-150 billion. It is also clear that while the public sector must always play a role in delivering infrastructure projects there is also plenty of scope for collaboration on major infrastructure projects with the private sector.

A consultation on the London Infrastructure Plan 2050 will run for three months and the Mayor is expected to publish a final report in early 2015.

David Tonkin, Atkins’ chief executive officer for UK & Europe, said: “People from all over the world want to visit, live and work in London and it plays a key role in the economic prosperity of the UK. World-class transport, utilities, energy and digital infrastructure are vital to maintaining this position and this long term, cross-sector investment plan is the vehicle that will help deliver these.

“As a company which helps cities all around the world to create a better future for its people, we applaud the GLA and the Mayor of London for taking this step to develop innovative and integrated proposals to repurpose and reuse existing infrastructure, while adopting and applying new technologies and techniques.”

Tony Travers, director of the London School of Economics, said: “The London Infrastructure Plan is a necessary step towards understanding the needs of the ‘10 million city’ which London will soon become.  The capital’s railways, housing and schools will all require substantial investment just to accommodate the additional one and a half million Londoners who government statisticians forecast will live in the capital within 15 years.  In reality, with higher densities will come a disproportionately greater need for investment. The Plan makes it possible to draw up proposals for developing schemes and raising resources.”

Professor Rahim Tafazolli, Head of the Centre for Communication Systems Research, University of Surrey, said: “London should be the first capital city in the advanced economy countries to deploy 5G broadband network to alleviate expected capacity crunch by 2020s. This will give the sensation of infinite capacity.

Zach Wilcox, Centre for Cities, said: “London’s fast growth brings with it many benefits, but it is also faces increased pressure in terms of transport capacity, housing and utilities infrastructure. The capital needs a long-term, integrated plan that links up infrastructure systems across the city—and city region—to support its continued success.”

Sir Alan Wilson, Professor of Urban and Regional Systems, University College London, said: "The pressures of population growth and London's continuing development as a world city demand some hard thinking about future infrastructure. This report is a significant step in developing a comprehensive strategy. It will bring into focus the decisions that have to be taken in the short run to benefit the long run.”  

Steve Fox, BAM Nuttall CEO, said: "We are encouraged by the visible commitment made by the Mayor and the GLA to improving London’s infrastructure. It’s a strong signal to the industry and it gives confidence to major infrastructure contractors such as BAM who are heavily invested in London projects in setting our future business strategy. It means we can invest in people, training and our local supply chains across the capital to support the Mayor’s London vision in the longer term.

“We fully support the introduction of a London Infrastructure Delivery Board that will be able to influence and assist industry and the GLA by providing expert knowledge and advice. Having been involved significantly with HS1, Crossrail and the Olympic Park Development, which are huge success stories for our industry, we know that by working together we can all deliver a more successful outcome.

“The Mayor and his office have demonstrated leadership in developing procurement models that improve collaboration across our industry leading to added value and we welcome this approach. It is only by customer, contractor, designer and supply chain working together at a sufficiently early stage to develop the business case that we will see gains in overall delivery.”

Civil Engineering Contractors Association Chief Executive, Alasdair Reisner, said: “Our industry has long argued that long-term visibility of workload is essential if we are to play our part in delivering world-class infrastructure in an efficient and timely manner. An infrastructure plan for London which has cross-party support will encourage innovation, better resource allocation, an improved skills base and a more stable workforce throughout the construction sector.”

André Gibbs, Partner at Argent, said: “Cities are for people, and new and replacement infrastructure must in all ways be planned, designed and implemented with the experience of the citizen at its heart.

Jeroen Hoencamp, Vodafone UK Chief Executive, said: “We share the Mayor’s strategic vision for the capital, and will work with him and the boroughs to provide Londoners and visitors with access to very best mobile data network. The future success of the capital depends on advanced communications and we are investing £200 million over the next two years to deliver a world-class network across the city on top of the £1 billion we have committed to spend nationally this year.”

Alexander Jan, a director of Arup, commented: “The Mayor has today launched a consultation on what is an unprecedented policy response to meet the needs of London’s population, which is growing at a rate of two-thousand every eight days.  Infrastructure investment activity will be required on an industrial scale not seen since Victorian times.

“Only a concerted, properly resourced plan combined with proper devolution of tax raising powers to London government can secure the commercial success of London.  This approach is essential to maintain the quality of life for Londoners now and into the future.   Arup is delighted to be working with the GLA on this prestigious project.”

John Dickie, Director of Strategy at London First, was a member of the advisory group that assisted the GLA with the plan. He said the 2050 Infrastructure Strategy was a: “big and ambitious plan that came with a big and ambitious price tag.

“The Mayor estimates we have to more than double London’s infrastructure spending – from an annual average of £16 billion in 2011-15 to £38 billion in 2016-50 – if London is to tackle the backlog of historic under-investment and keep up in the global race.

“We must prioritise ruthlessly and plan and deliver these investments efficiently; but we can’t shrink from the fact that we will all have to pay more. The costs can be shared across users, taxpayers and others who benefit directly -  but they cannot be wished away.

“And make no mistake: with London growing by 100,000 people a year, if we don’t deliver this extra investment then the capital will be a bigger but not better place in the future.”

 

Cllr Claire Kober, London Councils Lead Member for Infrastructure and Regeneration, said: "London Councils welcomes the start of a debate about London’s long term infrastructure needs. With the challenge of continued population growth, infrastructure investment needs to ensure that London remains both a competitive world city and a liveable one for all its different communities. To meet this challenge, Whitehall must devolve power to London government and allow greater financial independence.’

 

ENDS