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Infrastructure: Who Pays?

Following a recent application to build 400 new houses on a disused RAF site in Oxfordshire, the issue of infrastructure arose, particularly in regard to sewage disposal. It was estimated by the local water provider that it would cost them over £1 million to provide the resources required, which they refused to spend. The developer is still arguing with them.

The South-East England Regional Assembly (SEERA) is planning to build 80,000 houses in the south of Hampshire, but there are no plans to improve the existing infrastructure, which is already at breaking point. Ruth Kelly has now increased this number to a mind-boggling 146,000. There was already massive opposition to the 80,000 but SEERA decided to oppose only the new figure, thus appearing to be on the side of the residents but effectively diverting attention away from the 80,000. Neat. SEERA, our new - unelected - Regional Assembly covers both Oxfordshire and Hampshire, not to mention Kent, etc. Yet this is the organisation that will make decisions about our local environment, knowing little or nothing about our needs in little Taplow.

Take a moment to think about these figures and the infrastructure needed to support them. At a meeting to explain the South-East Plan to the Chiltern Society, a Bucks County planning chief estimated the cost of infrastructure to be about £38,000 to £40,000 per house. Looking at our little development in Oxfordshire (above) this comes to about £15 million. And for the 80,000 in Hampshire, the figure is likely to be £3,000 million! A bit closer to home, the additional houses at Cliveden and Dropmore should be supported by about over £7 million-worth of additional infrastructure funding. Think about the mind-boggling total for the massive building programme that this Government is planning to unleash on the South-east as a whole.

Infrastructure, of course, is the provision of the services needed to support people living in a particular locale and includes, inter-alia: hospital and school places (with a concomitant supply of doctors, nurses, auxiliaries, teachers and so on), utility supply (water, sewage, gas, electricity, telecommunications), road maintenance and upgrades, policing, waste disposal, public transport, etc., etc. This rather vague term actually defines our country. The quality of our life is conditional upon an adequate publicly provided infrastructure.

Today we are in an era of Government control of building programmes. Because of demographic and social changes, vast tracts of land scattered all over the South-East are being earmarked to absorb hundreds of thousands of houses and office spaces, which means people, which means facilities. The RAF site in Oxfordshire quite possibly has inadequate gas, water, power - you name it, it's probably not up to scratch. So where is the estimate of the slack in the publicly provided and maintained infrastructure that permits a private company to blithely propose an estate of 400 homes with possibly 1,000 people living there?

The cost is of course divided between capital expenditure and maintenance/running cost. We have to assume that the utility companies have set aside sufficient reserves for foreseeable changes to their supply position, but did they foresee the present government-generated demand? They can of course claim back the maintenance, running costs and capital levy from us, so they don’t really worry. Or do they? No responsible utility company can be happy to see their assets depreciate beyond economic use. It doesn’t help that utilities are now in private ownership and there is a natural conflict between shareholders' and users' interests. Normally a location will experience creeping development, a few houses here and there; a small estate springs up now and again and, somehow, the infrastructure copes. But the developer’s charter called the South-East Plan changes the picture dramatically. So, are we, the taxpayers of England, expected to quietly fork out the additional billions needed to fund this infrastructure explosion, which will help private developers to become extremely rich?

Moreover, there is another issue here that needs addressing. Where is the mechanism in the planning process that permits planning officers to properly assess the impact of development on the infrastructure? The present system assumes the infrastructure to be available and able to cope with new planning permissions. This leaves the providers of services with the problem of having to meet the needs of the incoming population. What sort of demand is the St. Regis site development going to make on infrastructure?

The term "sustainability" has been hi-jacked as a catchall word to cover many things it was not coined to represent. To paraphrase the Rio Conference definition, "Sustainability is about so managing the earth’s resources that our grandchildren will not have cause to hate us". This definition is a long way from from the Cliveden interpretation but, since it's in common use, let's continue with it. The South-East Plan and all intermediate planning documents down to the new Local Plan do not specifically address the provision of infrastructure. The assumption implicit in these plans is that infrastructure already exists or will exist.

There should be a more structured approach that requires speculative developers to identify and pay for the infrastructure needed to support their building programmes. The £38,000 mentioned as the infrastructure cost at the beginning of this article was obviously based on some algorithm and suggests that somebody has done their homework on the problem. One possibility is that infrastructure could be assessed for cost recovery according to its "distance" from the action. We might define the bands of responsibility as direct, secondary and tertiary infrastructure. An example of direct infrastructure is the provision of mains water to a new development, such as Cliveden. In this case the developer is expected to pay. Secondary infrastructure involves limited capital expenditure, such as expansion of sewage treatment or re-routing of water supplies (such as the filching of our water northwards last year) - a situation that arises due to increased overall demand which cannot be laid at the doors of any particular developer. Tertiary infrastructure is on a much larger scale and is the result of social and demographic pressures and includes projects such as widening motorways, a much-needed water grid, or a rebuild of the London water disposal system. This, of course, has to be paid for at government level, probably in combinations with the local authorities. Unfortunately this seems to mean that the developer gets away with only direct infrastructure costs, leaving you and me to foot the bill for all the rest.

This leaves a gaping hole in the recovery of secondary costs. Is this is a challenge for the South-East Region to meet? For instance, each planning application could be accompanied by a Certificate of Infrastructure Compliance, which the developer is responsible for acquiring. The certificate has to be approved by, say, all utility companies, county traffic authorities, etc., effectively certifying that the development will either have no impact on existing infrastructure or estimating the cost of providing it (witness the Oxford case above). If there is an additional cost, then an appropriate levy will be charged to the developer, payable to the utility, and ring-fenced to ensure it is appropriately used.

Accepting that this article is a bit of a rant, the facts demand that some action is taken to correct this serious lack of forward infrastructure planning.

Fred Russell