Is Treasury getting its act together on Infrastructure Investment?

The departure of the DECC permanent secretary (days after the announcement of the Treasury £50 billion programme to stimulate infrastructure investment) indicates that HMG may finally be getting its teeth into the mix of centralised but nonetheless conflicting and fragmented (across departmental and regulatory boundaries) planning, control and regulatory initiatives that it inherited. The problems are not confined to utility infrastructures with DECC, BDUK, Ofcom, Ofgem et al. There are similar problems from financial services (where they helped cause the current crisis) through to health and welfare. The problems are, however, particularly acute with regard to infrastructure. We have growing rumours that neither DECC nor DCMS will survive the post-Olympic reshuffle because they, and their regulators, appear to be standing in the way of the investment needed to help pull forward recovery rather than bringing it forward. Meanwhile it is said that the officials working on Broadband and on Smart Meters are banned from speaking to each other because they are engaged in competing procurements (for communications infrastructures) with the same suppliers.

My advance reading for a meeting last week on bringing together Energy and Communications policies as part of an affordable “green” agenda, included a very sharp and well informed attack on the current smart metering programme. It was described as Ed Milliband’s “poison pill” for his successors. Unfortunately the author, usually a great advocate of open government (you know who you are) marked it as “not for circulation”. I hope he will change his mind after reading the rest of this post – if only to complain about having his paper misinterpreted.    

On the 17th July the Conservative Technology Forum sub-group looking at Energypolicy discussed the need for the Smart Metering programme to be builtround business models that are attractive to both consumers and investors andencourage the creation of secure and resilient shared infrastructure networksat a price that all, including taxpayers, can afford.

It had received some “challenging” inputs. These included a hatchet job on the smart metering plans passed from Ed Milliband to Chris Huhne in May 2010. That paper could be summarised as describing current policy as “a very expensive regulatory and consultancy job-creation programme that will inevitably lead to duplication and waste of effort plus increased costs and lock-ins for  consumers and ongoing taxpayer subsidies, while protecting incumbent suppliers from competition now and for the foreseeable future.” 

However, rather than indulge in criticism of the shortcomings of the current, (largely inherited),  policy, the meeting agreed to concentrated on the positive – the key points to be addressed in suggesting a policy framework to enable us to move from where we are now to a way forward that is practical, affordable and credible.   

These included:

1)     The ConsumerExperience: What is in it for the consumers who will elect the next government?lower costs? greater control? choice etc.?

2)     The business casefor investors: what are the business models? Why should the Ruritanian TeachersPension fund invest in UK infrastructure and utility companies, consortia orprojects?

3)     The need to buildand operate using world-class, future proof, international inter-operabilitystandards to prevent lock in to second-class business models and help ensurecompetition, choice and global competitiveness as markets evolve.

4)     The need for simple,clear and effective Market Rules that help ensure sustainablecompetition and choice in the interests of both consumers and investors.

5)     Security andresilience: from sustainability of supply to the protection of consumers fromrogue operations staff (access and selling information) to the protection ofoperators and networks from rogue consumers (stealing energy or disruptingsupply).

6)     The need forinformation (and routines to communicate this) covering the location andcharacteristics of equipment and networks to help both sharing and resilience (including checking that critical services do not unwittingly sharevulnerabilities).

7)     The review ofcurrent and planned incentive schemes  to ensure that they are effectivein using the funds available to achieve agreed and prioritisedobjectives.

Work on some of these is already under way and I suspect that an unpublished review of 7) above may have triggered the departure of the DECC permanent secretary this week.

That meeting happened to be of the Conservative Technology Forum but I suspect there is real potential for all-party concensus. I doubt that Ed Milliband as opposition leader would wish to defend what was done in his name as DECC Minister any more than he is seeking to defend other inherited policies that the current government is seeking to change as it endeavours to cut speed (public spending) and alter course (market led recovery) before the Titanic hits the iceberg of another (and more brutal) IMF bail-out.  

P.S. What has this to do with IT?  We have to ensure that the smart metering programme is a stepping stone, not an an obstacle in the way, to the creation of the smart infrastructure to support the world of ubiquitous computing. If we get it wrong it is not just the lights that will go out.

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