Our challenge is not to innovate or die. It is invest or decline

I was walking home after work a few days ago past my local riverside park, when I noticed to my surprise a group of individuals busily trimming the grass edges to one of the paths. I went over to talk to them and confirmed as I suspected that they were a recently formed group of volunteers, a Friends of the Park, group. “The council doesn’t have the money to maintain it any more,” I was told. They are on Facebook but a website is planned. They want to raise £200,000 to replace the playground equipment.

I worry that we are not making a conscious decision to repatriate responsibility to our communities; it is just happening around us

We all know this is not an isolated example but part of a clear trend across the UK of tighter local authority budgets leading to local community groups stepping in where the council has retreated. Amenities from community centres to local museums are being threatened with closure and where there is sufficient local determination and organisation, the operation is being taken over. Otherwise the amenities close – 343 libraries were closed between 2010 and 2015 and 350 youth centres between 2012 and 2014. 

Is this something to be deplored, or just accepted as the consequence of changing needs, local choices and declining economic wealth?

Far too much money is raised and allocated centrally, depriving local authorities not only of financial capacity but also of the incentive that comes from being able to invest in one’s own future

The extent to which local assets are built, maintained and operated by the local council can be a matter of cultural or political choice. I was reminded during my conversation in the park of a passage in Jon Sopel’s book about the United States, If only they didn’t speak English, where he explains how the Washington DC community responds when there is heavy snow. “Soon we were all out with our shovels and picks, brooms and salt, digging out and clearing the sidewalk, sorry pavement. It is what you do. There is no waiting for the council to come along; everyone has an individual responsibility.”

And if that responsibility is accepted, and can be carried in the community, then in principle it works. But I am not convinced that the community engagement I am seeing in my home town, or is supposedly embedded in US culture, is necessarily representative across the UK. There are places where the sense of community is not so strong, where individuals have less time to give, where there is less capability in the community to step in. I worry that these are the places that most need their community centres and leisure facilities. And are most likely to lose them.

And I worry that we are not making a conscious decision to repatriate responsibility to our communities; it is just happening around us.

“We can’t afford it” is the widely accepted basis for what we are seeing. But it is not actually true. The UK is not bankrupt or close to it. We are making financial choices as to who holds the budgets and what they can be spent on.

I presented recently at an event in London with the Asian Infrastructure Investment Bank (AIIB). My brief was to talk about the UK’s infrastructure experience which could help progress the huge pipeline of projects across Asia Pacific, many within the ambit of China’s Belt and Road Initiative. It is flattering that organisations like AIIB continue to look to the UK for guidance, and in fairness we have done a lot of things over the last few decades that deserve credit: the establishment of the National Infrastructure Commission, and the quality of many of the reports it has produced; formal and detailed guidance for business cases; robust prioritisation criteria; the major infrastructure planning regime; and the way government has encouraged the uptake of Building Information Modelling, to name just a few.

But where it goes wrong is with the allocation of money. First, far too much money is raised and allocated centrally, depriving local authorities not only of financial capacity but also of the incentive that comes from being able to invest in one’s own future. And as those budgets have been squeezed, spending on services by local authorities has declined by an average of 24% since 2010.

Second, we are a society of consumers that spends the vast majority of the wealth we create on ourselves. On average, OECD countries invest 3%-4% of their economic output on infrastructure. Even allowing that the National Infrastructure Commission’s remit is restricted to economic infrastructure, its fiscal ceiling of 1.2% indicates that we are not close to keeping pace. It has been like that for at least 40 years. And it matters because ageing infrastructure is more costly to maintain, exacerbating the drain on our income.

The UK still punches way above its weight. We have outstanding universities, a clear rule of law, diversity and tolerance (generally) and huge strength in London’s financial and other services. But the geopolitical tide is against us as economic prosperity continues to climb in the world’s most populous countries, especially China and India. Our challenge is not innovate or die. It is invest or decline.

Richard Threlfall is head of infrastructure, building and construction at KPMG