New research from the Institute of Economic Affairs (IEA) reveals the true scale of Britain's infrastructure crisis, showing that the UK pays several times more than its European and Asian peers to build major transport infrastructure, and waits far longer for it to open.

The analysis, written by Valentin Boboc, finds that HS2 Phase 1 has cost roughly £470 million per route-kilometre, making it the most expensive high-speed railway in any international database. By comparison, Japan’s Shinkansen extensions through the seismically active Japanese Alps cost between £50 million and £100 million per kilometre, whilst the European average for comparable projects is roughly £25 to £32 million per kilometre.

This disparity is not due to geography or labour costs. Japan’s labour costs are similar to the UK’s, its land is scarcer, and its terrain is more challenging, yet it builds high-speed rail more efficiently and at lower cost. British Nationally Significant Infrastructure Projects typically take nine to seventeen years from inception to opening, compared to three to six years in Japan.

Among the report's key findings:

Britain faces an urban connectivity deficit. All French cities with populations over 150,000 have a tram, light-rail, or metro system, while about 30 similarly sized British towns and cities lack such infrastructure. In Marseille, 87% of residents can reach the city centre by public transport within 30 minutes, compared to 38% in Leeds.

The costs of inaction are significant. Cancelling HS2’s Birmingham to Manchester leg has left underdeveloped links between the West Midlands and the North West for at least a generation, with estimated annual foregone benefits to Greater Manchester alone ranging from £0.6 billion to £1.3 billion.

The construction sector lacks innovation. UK construction productivity declined by an average of 0.6% per year between 1997 and 2019, compared to 2.8% growth for the whole economy and 3.9% for manufacturing.

Even projects that pass the planning stage often fail. Since 1991, Leeds has spent over £70 million attempting to build a mass transit system, yet no track has been laid. A third attempt is underway, with first services not expected until the late 2030s, resulting in a 45-year gap between the original proposal and delivery.


The report sets out a series of reforms drawn from international experience, including devolving infrastructure powers and funding to combined-authority mayors, replacing discretionary planning with clear rules that enable development by right, narrowing the grounds for judicial review of infrastructure decisions, opening procurement to international competition and reforming compensation law to allow land value capture around new transport links, following the model used by Hong Kong’s MTR and Tokyo’s private railways.

This briefing is part of a series published by the IEA on Britain's 'Great Stagnation', which diagnoses Britain's growth problem. The next briefings in the series will be published in the coming weeks and will be compiled into a full book published in September.

Britain has an institutional problem when it comes to building infrastructure. We spend as much as our neighbours on infrastructure projects and get a fraction of what they get for it, because nobody in the system faces hard budget constraints, whilst the planning system gives asymmetric power to blockers over builders. Leeds has been trying to build a tram network since 1991 and still has nothing to show for it, largely because our planning and procurement rules do not reward delivery according to commercial incentives.