Infrastructure experts warn on risks of indecisive election

An indecisive election result on Thursday may stall plans for billions of pounds of crucial infrastructure projects including roads, railways and schools, UK business leaders have said.

Politically difficult decisions could be sidelined or avoided if the next government is a fragile coalition or minority government, said Nick Baveystock, director-general of the Institute of Civil Engineers.

He warned of "a cloud of uncertainty - on any foreseeable combination of single or multi-party government". "Airport expansion hangs in the balance, and the various degrees of austerity proposed by different parties could hit infrastructure projects," he said.

Tony Travers, director of the London School of Economics, said a weak government would find it easier to spend on popular public services that have featured heavily in the election, such as nurses and schools.

"That will squeeze the amount left for capital investment," he said. "Starting to build a bridge or road that your successors take credit for in 10 years isn't very appealing."

Noble Francis, economics director of the Construction Products Association, which represents manufacturers and suppliers in the £50bn industry, also warned that an unstable minority government could cause a "hiatus in capital investment and signing contracts" especially on large projects.

Some of Britain's big infrastructure decisions would be contentious for a single-party majority government - let alone a vulnerable multi-party administration.

The first such decision is how to deal with a long-awaited report on where to build a new runway in southeast England.

An independent commission will recommend either Gatwick or Heathrow this summer - but no political party has promised to accept its decision and the Liberal Democrats have a manifesto commitment to build no new runways.

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The UK already languishes in 27th place in the World Economic Forum's "quality of infrastructure" rankings - behind Barbados and Saudi Arabia - and there is further uncertainty for big projects because the next administration is expected to introduce fresh spending cuts.

Most parties are promising to ringfence health and schools budgets, which is likely to mean cuts to capital spending - although Labour has said it will borrow more to invest in large infrastructure projects.

It has also promised to set up an independent infrastructure commission that will identify the UK's long-term needs and guide investment decisions. But sceptics doubt whether it would be powerful enough to hold sway on highly politicised decisions such as new airport capacity.

David Cameron, the prime minister, came to power promising to drag the economy out of recession by delivering 500 building projects. Yet capital investment - which includes new projects as well as maintenance - shrank by one-third in real terms from a high of £57bn in 2009-10 to £42bn in 2013-14, according to the National Audit Office. Infrastructure output fell by 8.5 per cent between May 2010 and February 2015, said the ONS.

The sector that suffered most in the early years of the coalition was roads construction, which fell 49.8 per cent between 2010 and 2012. It then rose 28 per cent as the government partially restored funding in the two years until 2014.

The difficulty of turning proposals into schemes has been underlined by delays to projects such as rail electrification. Plans for a new nuclear reactor at Hinkley Point in Somerset have also run into trouble.

The Treasury's £466bn plan for infrastructure encompasses the £50bn High Speed 2 rail scheme. It has also proposed a "High Speed 3" line from Manchester to Leeds as part of its "Northern Powerhouse" proposal to boost links between northern cities. But even HS2 is not a done deal at this stage - the Labour party has threatened to review the whole project.

There will also be big decisions for the next government on the Green Investment Bank, a state-backed bank created to invest in green infrastructure, and subsidies for low-carbon energy beyond 2020.

Labour has also cast doubt on some road projects pencilled into the Highways England five-year plan; it has promised to fund a one-year freeze in rail fares by delaying the A27 and A358 roads projects.

Flood defences also appear an easy target for cuts - none of the major parties has committed to a long-term investment plan to maintain existing defences.

Although the devastating floods in the winter of 2013-14 led to ministers partially reversing cuts to flood defence spending, a report by the UK's National Audit Office last November found funding has fallen by 10 per cent since 2010.

Attempts by the coalition government to encourage alternative sources of infrastructure financing in the form of pension fund and other institutional investment have been largely unsuccessful, raising just £330m against a target of "up to £20bn".

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