Written evidence submitted by the Group (MTP0080

Executive Summary 1. Key issues ● Transport infrastructure is critical to economic growth ● Infrastructure development is central to the levelling up agenda and spreading opportunity ● An infrastructure pipeline is only useful if it is delivered and to planned timelines to provide investment confidence ● Major projects need advanced investment to secure the supply chain and capacity ● A ‘stop / start’ approach without reliable delivery schedules impacts investor confidence ● Global businesses need to decide between competing international investment priorities 2. Infrastructure pipeline should be used to deliver a green recovery

● Early supply chain engagement should be used to achieve: o Climate change targets o Environment and cost benefits o Uptake of low carbon products and technologies o Supply chain innovation ● Infrastructure improvements will be needed to achieve zero carbon transport ● Public procurement rules should focus on life cycle outcomes ● Major projects need well-maintained local transport networks to maximise benefit ● Mechanisms should be put in place to ensure delivery on time and within budget ● Planning processes should be streamlined with a holistic approach to local and national mineral needs

3. Tarmac has a track record of successfully supplying materials to major infrastructure projects, and providing further environmental, circular economy and cost benefits through early collaboration.

Introduction

4. Tarmac is the UK’s leading sustainable building materials and construction solutions business. Our innovative services and solutions help to deliver the infrastructure needed to grow the economy today and create a more sustainable built environment to support our future prosperity. We employ over 8,000 people at approximately 400 operational locations across the UK.

5. Tarmac’s Materials business is the leading supplier of construction materials in the UK. As a key supplier to major infrastructure projects such as HS2 and Crossrail we provide significant volumes of aggregates, asphalt and readymixed . Tarmac Contracting is the number one surfacing company in the UK, completing maintenance work for over 50 local authorities and regional frameworks and the largest provider of surfacing services to Highways England. We operate full maintenance contracts for carriageways and associated infrastructure, fully supported by our large materials business, with materials supply contracts in place. Tarmac also has a specific asset management offering, partnering with industry experts to provide an ‘end to end asset management service’ from data collection and analysis through to securing funding and scheme delivery to local government, based around whole life costing and investment reviews to ensure best practice solutions are chosen.

Transport infrastructure strategy and priorities

6. Transport infrastructure is critical to economic growth and levelling up. Mineral Products Association (MPA) data for 20181 demonstrates the value of the industry to the UK economy. The minerals industry employs 81,000 people directly, supplies industries with an annual turnover of £597bn and supports 3.5 million jobs in the supply chain. The output of the construction sector, the mineral industry’s main customer, has a value of £172bn to the UK economy.

7. Poor infrastructure directly impacts productivity and economic growth and the OECD recognise the link between adequate maintenance budgets and local economies2. Further reports from the DfT suggest that, ‘Expenditure on local roads has a Benefit Cost Ratio of 4.23’3 and ‘significant additional investment provides benefits in excess of costs of more than 4.5 times4.

8. Infrastructure projects need a range of mineral types from geological deposits located in geographically diverse locations around the UK. Each mineral type has different performance characteristics. This means that often large amounts of aggregates and minerals of national strategic importance need to be manufactured and transported from specific, often rural locations to satisfy specified technical needs of a project in different parts of the country.

9. Therefore, economic contributions of major infrastructure investment are not just limited to the geographic location of the project. During the construction phase there are benefits all the way through the supply chain, including operations at other regional and rural locations where mineral products originate. 10. The commitment by the Government to ‘do whatever it takes to ensure the economy recovers as swiftly as possible’ along with the increase in the 2020 capital budget and the proposals in the NIS5 for local and regional transport infrastructure improvements are welcome. Moving goods and people more efficiently using low carbon solutions maximises the potential of Government investment and is crucial to regional development and growth. Using high-quality mineral products from across the UK, for sustainable development of all modes of transport infrastructure at different geographical locations around the country, is central to the levelling up agenda and spreading opportunity for all. 11. Whilst an ambitious infrastructure pipeline is welcome, world-class projects must be delivered to a world-class timeline, within budget and strive towards world-leading environmental and climate standards in order to meet net zero targets. Setting proposals and plans for infrastructure projects with a value of up to £167bn is very welcome but they must be followed through – an infrastructure pipeline is only useful if it is delivered - getting goods and people moving again will be vital as the UK emerges from the impacts of the Covid-19 recession. Developing new infrastructure, in particular regional projects, will boost economic prospects through supply chains across the country, as well as laying the foundations to improved transport links for the benefit all in the future. However, none of these benefits will be realised if projects are not completed.

12. To ensure the supply chain delivers the large volumes of high-quality materials needed for major infrastructure projects on time and in full, investment in capacity is needed. Manufacturing capacity and mineral reserves require significant investments, for which advanced consideration must be made due to investment and budgeting cycles, in addition to legal processes such as planning permissions. Securing mineral reserves and operating permissions require investment periods that regularly exceed 10 years. Indeed, planning to construction can take 15 years. In developing ambitious infrastructure renewal plans, the ability of the supply chain to provide the material that is needed to build the project should be factored into planning sufficiently far in advance to allow for investment in capacity. Mineral bearing land needs safeguarding and identifying within all local plans. We support the Managed Aggregates Supply System (MASS) but it desperately needs central government resourcing.

13. Delays to major projects such as HS2 and Road Investment Strategy One (RIS1) have undermined confidence, with 37 of 112 of the RIS1 projects impacted by cancellations or delay. A ‘stop / start’ approach to UK infrastructure pipeline projects, without reliable delivery schedules, impacts investor confidence in a timely return on investment.

14. For international construction materials businesses, proposals for investment in the UK compete on a global scale against priorities in other countries. Therefore, it is vital to re- establish trust and confidence in UK major projects to obtain the levels of private investment required for a sustainable and effective supply chain.

Infrastructure pipeline should be used to deliver a green recovery

15. Early supply chain engagement should be employed for any infrastructure project to support the achievement UK’s 2050 net zero ambition. When involved from early stages, Tarmac can use our expertise, products and solutions to ensure the final outcome is a sustainable, low carbon, long lasting, durable asset, resistant to the effects of climate change – including fire and flooding. Tarmac supply a wide range of construction materials that provide these qualities and more, as the UK transitions to net zero. For example, our innovative warm mix asphalt has a reduced carbon footprint and we have a range of low carbon available today. Furthermore, not many people are aware that concrete recarbonates through its life, that it is reabsorbs and permanently locks up a significant 6 proportion of the CO2 emitted during its manufacture . Work continues on our own net zero transition and as The Mineral Product Association’s UK Concrete Roadmap to Beyond Net Zero7 explains, manufacturing processes are improving to reduce the embodied carbon of and concrete. The end goal is net negative concrete, which is achievable with government policy support.

16. Early involvement in a project can facilitate the uptake of low carbon products/technologies. The industry is innovating to contribute towards government targets, but in general the client is not taking the opportunity consistently. To reach net zero targets, clients can make use of sustainable and low carbon products that are already available, in some cases they have been for many years now. 17. Tarmac advocate a whole life carbon and costing approach for construction projects. Collaboration at an early design stage supports supply chain innovation and can reduce waste, maximise circular economy opportunities and deliver improved value, as demonstrated in the Tarmac/Costain Heysham bypass project8. This project achieved headline carbon footprint savings of over 23% – representing 5,000 tonnes of CO2e – and cost savings equating to approximately 11% of total package value. By considering major projects over the whole life, environmental and climate change considerations can be made more effectively. Indeed, construction materials such as asphalt, concrete and aggregates can often be recycled into the project. In the example of Heysham, it was even possible to divert 97% of waste from landfill. Early engagement was critical to the project’s success.

18. Tarmac uses bulk rail transport to minimise carbon emissions and improve air quality. The benefits of bulk rail transport include lower CO2 per tonne transported and removal of HGV movements from public highways, with one aggregate train removing up to 60 HGVs from the road. Rail freight also has far lower NO2 and particulates emissions. Full electrification of the network, as part of national infrastructure improvements would go further to progress this mode of transport towards zero carbon emissions. This is a feasible transition technology that is already in place and can be developed across the network in advance of the introduction of other potential solutions for bulk rail. Furthermore, it does not require the need for the development of new technology to power locomotives. Indeed, renewable electricity generation continues to increase as a proportion of overall generation in 9 the UK , decreasing the CO2 emissions associated with electric rail transport.

19. With regards to the ‘final mile’ delivery required for bulk deliveries, as technology improves for HGV engines, major infrastructure improvements will be needed to supply the alternative fuels for future engine technologies, for example, gas or electricity.

Appraisal and Funding of Transport Infrastructure

20. There is an opportunity to use public procurement rules to reduce carbon emissions and develop more sustainable transport infrastructure by focusing on life cycle outcomes. Government procurement processes for major infrastructure projects should be based on lifecycle value and carbon footprints. The Green Book review gives an opportunity to improve procurement, by including output specifications for whole life carbon to deliver the greenest possible recovery.

21. Tarmac supports the recommendations of the Transport Select Committee’s report – ‘Local Roads Funding and Maintenance: filling the gap’10 particularly with regards to a ‘front loaded, long-term funding settlement’ to ‘address the historic road maintenance backlog and plan confidently for the future’. As the report suggests, further opportunities exist for asset management and digitisation. Action needs to be taken, the Asphalt Industry Alliance independent ALARM survey, March 2020 shows that around 20% of carriageway maintenance budget is spent on reactive maintenance and funding for local road maintenance decreased in 2019/2011.

22. Major projects will not deliver their full potential without well-maintained local transport networks. Planned, preventative national asset maintenance needs to be implemented to deliver long-term value to road users and the public purse. The improved management of local roads maintenance should be part of a holistic approach to an infrastructure revolution that allows the economic benefits of world-class transport to be delivered to all, wherever citizens or businesses are based, across the whole of the UK and truly ‘level up’ the economy.

Oversight, accountability and governance of transport infrastructure projects

23. The serious issues with project delivery demonstrate that mechanisms need to be implemented for robust planning and implementation of projects. Delivery of future infrastructure ambitions on time and within budget is vital to stimulate a green recovery and level up the economy.

Factors influencing the costs and capacity and skills required to deliver the infrastructure plans

24. There is a need for local authorities to develop improved, consistent skills, focussing on whole life costing and work collaboratively to improve efficiencies. Embracing new technology will enable assets to be digitally mapped to form an accurate, cost-effective and comprehensive management plan.

25. To secure a sustainable supply chain, capable of serving significant nationally important infrastructure projects as well as ongoing local needs, the necessary mineral reserves need to be in place, wherever they may be located. The National Planning Policy Framework (NPPF) requires a steady supply of local minerals, but there is little coordination between these local processes and national, strategic major infrastructure project needs. To facilitate this, local planning processes need to promote strategic decision making. With historical levels of mineral replenishment, the government should give added weight and national importance to major rock sources that can contribute to infrastructure in the future, so that they are both safeguarded and available to sustain vital supplies.

26. Planning permission processes should be more efficient. They often take many years from application to award and these processes are more difficult and costly to navigate than operating to the relevant regulations themselves. Sensible changes to these processes are required to ensure a streamlined and more strategic approach to securing the necessary minerals for major projects. Permitting processes for operations can also be streamlined, whilst still maintaining operational standards. Actions in both areas would reduce time and cost and facilitate capacity of supply.

27. Economies of scale could be found through the consideration of multiple pipeline projects together, rather than in isolation. This could decrease overall costs and present other opportunities such as the implementation of circular economy thinking. It should also ensure that supplies of raw materials are consistent and arrive on time in full during a project.

28. In conclusion, Tarmac has extensive knowledge and experience in the supply and construction of major infrastructure projects and local roads maintenance. We have successfully participated in a variety of contracts that seek to bring a more strategic approach to asset management to deliver socio-economic benefits, cut maintenance backlogs, improve local road safety and deliver long-term savings.

February 2021 References

[1] Mineral Products Association – Profile of the UK Mineral Products Industry https://mineralproducts.org/documents/Profile_of_the_UK_Mineral_Products_Industry_2020 _Spread.pdf

[2] OECD Report, Policy Framework for Investment, A Review of Good Practices, 2006 https://www.oecd.org/daf/inv/investment-policy/40287425.pdf

[3] DfT Eddington Study, 2007.

[4] Philipp Thiessen (DfT), Tom Buckland and Richard Abbell - ‘Valuing the wider benefits of road maintenance funding’.

[5] HM Treasury – National Infrastructure Strategy Nov 2020 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data /file/938539/NIS_Report_Web_Accessible.pdf

[6] Cement and concrete Research, Carbonation as a method to improve climate performance for cement based material https://www.sciencedirect.com/science/article/pii/S0008884619301929

[7] The Mineral Product Association UK Concrete Roadmap to Beyond Net Zero: https://thisisukconcrete.co.uk/Perspectives/UK-concrete-and-cement-sector-sets-out- roadmap- for.aspx#:~:text=Launching%20the%20ambitious%20roadmap%2C%20UK,or%20Storage% 20(CCUS)%20technology%20for

[8] Heysham Bypass Case Study – Tarmac and Costain https://innovation.tarmac.com/case-studies/sustainable-collaboration-on-the-highway-to- heysham/

[9] Ofgem - Electricity generation mix by quarter and fuel source (GB)9 https://www.ofgem.gov.uk/data-portal/electricity-generation-mix-quarter-and-fuel-source-gb

[10] Local Roads Funding and Maintenance: Filling the Gap, Tenth Report of Session 2017- 19, Transport Select Committee: https://publications.parliament.uk/pa/cm201719/cmselect/cmtrans/1486/full- report.html#heading-1

[11] ALARM Survey, March 2020 https://www.asphaltuk.org/alarm-survey-page/