Treasury's £30bn savings plan

By This Is Money
Updated: 06:26 EDT, 22 December 2010

Britain could save £30bn in a decade on transport, energy and water projects, according to a Treasury report.

Helping hand: Network Rail spent £10m to help protect animals

The study, carried out by infrastructure UK, a division of the Treasury chaired by former Rio Tinto supremo Paul Skinner, said costs are significantly higher here than abroad and could be reduced by at least 15%.

It turned a spotlight on the fact UK firms spend more on ecology and the environment than European countries. Network Rail spends £10m on the preservation of bats and badgers and also delayed a £53m rail bridge after the discovery of a colony of 11 great-crested newts.

The cost of the first phase of the Channel tunnel rail link was almost 25% higher than equivalent schemes on the Continent and UK road projects were 10% more expensive per kilometre than in the Netherlands.

Lord (James) Sassoon, commercial secretary to the Treasury, said the savings will 'enable taxpayers and utility bill payers to get more for less'.

The report found costs were driven up by a number of factors, including muddled decision-making and lack of direction, particularly in the public sector, with projects being started before the design was complete.

The report noted that the UK construction market is smaller than in other major European countries, with lower levels of investment and heavier use of sub-contractors.

It suggests a number of measures including greater transparency by the government so that companies can plan their recruitment and training.

Ian Tyler, chief executive of construction company Balfour Beatty, said: 'There is now a real opportunity for government and industry leaders to work together and find ways to reduce costs and stimulate economic growth.'