How consulting firms can deliver value to infrastructure sector

25 August 2020 7 min. read

Whether it is infrastructure like roads and trains, to power networks, water systems and public transport, or internet connectivity, the UK’s most crucial infrastructure is facing massive challenges in the coming years. A new report has highlighted how management consultants can play a valuable role.

From the Covid-19 pandemic, to the resulting recession, to the challenges of Brexit and climate change, the UK’s infrastructure will need to adapt quickly if it is to serve the country’s needs in the make-or-break years ahead. For example, infrastructure experts are becoming increasingly concerned that vital infrastructure – from homes and buildings to transport, water and energy networks – is unable to cope with the added strain from the increase of heatwaves in the UK.

Extreme weather patterns are growing more likely in Britain, with 2020 on course to be the hottest year on record. Illustrating how this may already be impacting life in the UK, several infrastructure experts pointed to August’s Stonehaven derailment, in which a train crash caused three people to die, while many more were injured. As reported by The Guardian, it was suggested that the derailment may have been caused by a landslip after heavy rain, with experts citing it as an example of the kind of incident that may grow more frequent unless urgent action is taken to make the UK more resilient to the impacts of the climate crisis.

How consulting firms can deliver value to infrastructure sector

With this in mind, the UK Government has stated its ambition is to pump billions of pounds into revamping the country's infrastructure – something set out in the 2020 budget. Designing and running such programmes can be very complex, and require specialist expertise. This is where external consultants come in.

Working alongside asset owners, operators, contractors and other external professional including architects, designers, lawyers and financers, management consultants are often asked to help clients structure their programmes, deliver work streams and bring change management. In recognition of this, between £29 billion and £37 billion of state contracts across economic and social infrastructure are being brought to market over the next year to support the UK’s infrastructure development.

While there commonly is criticism on the high fees charged by consultants, it is often claimed that they provide more value than they charge for such engagements. Illustrating how this engagement with private professional services firms can assist the Government’s efforts, a new report from the Management Consultancies Association (MCA) has highlighted a number of key benefits to contracting external experts.

A statement accompanying the group’s report said, “[Consultants] enable organisations to improve performance, reduce costs, and improve the productivity and wellbeing of their employees… Consultants help clients achieve these outcomes in many ways – improving organisation structures, processes, and ways of working, implementing better digital and data solutions, working more effectively with suppliers, or enabling teams to collaborate better.”

Demonstrating how consultants can add value, the MCA showcased five areas where consulting firms worked shoulder to shoulder with clients and delivered value.

Delivering utilities infrastructure

Pointing to a recent project undertaken by one of the MCA’s member firms, the organisation suggested that one area consultants can play a defining role in is utilities infrastructure. One major UK utility player contracted an MCA member to deliver a multi-billion construction and maintenance programme.

Changing how the firm works with contractors and suppliers, the programme delivered the client £387 million in cost savings in the short-term, while providing long-term benefits of improved supplier relationship management, and new processes.

Delivering transport infrastructure

Transport infrastructure is also in need of a major overhaul, with the rising use of e-vehicles, and self-driving cars having to be supported. Illustrating what consultants are already doing for the transport infrastructure segment, Highways England has just completed its five-year investment period, during which MCA member firms supported the organisation and its suppliers to adopt a radical productivity improvement plan helping to drive improvements.

This included ensuring construction schemes were delivered, infrastructure maintenance was carried out, and that Highways England itself operated in an effective infrastructure management role. Over £300 million in capital efficiencies were realised through the adoption of new practices, thanks to the input of consultants.

Making organisations more effective

Consultants have undertaken a number of projects to help infrastructure firms become more effective in their work. Successfully delivering infrastructure associated with water supply and building new homes is one of the most critical priorities for investment in the UK. Following engagements with consultants, the MCA claims Anglian Water is now able to provide developers with faster, predictable solutions and is ready to meet the customer service requirements of the future. Digital transformation work has placed the business on track to deliver an estimated £35 million in capital delivery savings over the next five years, along with an uplift of 15% in operational efficiency.

Meanwhile, Network Rail is digitising its infrastructure, targeting improvements in capacity, journey times, reliability, and customer experience. MCA member firms have worked with Network Rail and the wider rail sector to create a new management entity to coordinate the management of new infrastructure across the whole industry – unlocking decades of silo working and drive up to £820 million of efficiencies.

Industry strategy and policy

Cities and Combined Authorities have benefited from devolved power and enhanced funding for the infrastructure they need to serve their citizens. MCA member firms have developed regional plans to bring together transport, utilities, housing, broadband and social infrastructure as integrated construction programmes.

Along with bringing planning, programme management, and technology skills to public sector teams, consultants have also provided external training and good practice coaching to enable the public sector teams to make the most of the changes projects bring about. To this end, the MCA stated that its member firms are actively supporting regional programmes across the UK, underpinning the government’s levelling-up agenda.

Finance and funding solutions

Finally, consultants can bring crucial skills to an infrastructure project in terms of funding solutions. One example pointed to by the MCA was the Thames Tideway Tunnel (TTT), a major project to build critical sewerage infrastructure for London, relieving pressure on existing, ageing infrastructure and preventing sewage overflow discharging into the River Thames.

The scale of the investment needed meant an innovative method was required for funding. An MCA member firm worked with Thames Water to improve collective understanding of technical and construction risks for investors, enabling these risks to be mitigated and managed. This led to a reduced cost in finance, resulting in customers paying £55 a year less on their annual bill.