Another issue on top of this: Too many people/politicians think infrastructure investment is linear.
i.e. you can get away with freezing investment one year, and just spend twice as much in the future to "catch up".
It doesn't work like that. Here's why. /1
i.e. you can get away with freezing investment one year, and just spend twice as much in the future to "catch up".
It doesn't work like that. Here's why. /1
So your reaction to that first tweet was probably:
"B'wuh?! Why can't you just spend twice as much in future?"
And that's cool. I get that. It's how our brains work. But it's wrong.
Because you have to think about the CUMULATIVE costs over time of not fixing/investing.
"B'wuh?! Why can't you just spend twice as much in future?"
And that's cool. I get that. It's how our brains work. But it's wrong.
Because you have to think about the CUMULATIVE costs over time of not fixing/investing.
These (broadly) fall into three categories:
1) Mitigation costs
2) Inflationary costs
3) Opportunity costs
Let's start with the first one.
1) Mitigation costs
2) Inflationary costs
3) Opportunity costs
Let's start with the first one.
MITIGATION costs are the stuff you then have to pay for to cover the resource shortage.
A good example of this in housing: less houses = higher rents. Which individuals AND COUNCILS then have to pay (because councils then have no social housing stock to use)
A good example of this in housing: less houses = higher rents. Which individuals AND COUNCILS then have to pay (because councils then have no social housing stock to use)
Another REALLY good example of this is staffing. Ever moaned about your work paying for a contractor for YEARS because no one at the top will let your department hire a permanent person? Yeah - that.
Now imagine how much this problem has cost the NHS over the last 10 years.
Now imagine how much this problem has cost the NHS over the last 10 years.
INFLATIONARY costs are the ones that accrue because shit gets more costly over time. Not just DIRECT inflation, but things like increasing land or material costs, skill costs, or because things get more complex to build and thus cost more up front than they did before.
Land is the big one in housing (also an opportunity cost. more on that in a bit), but also skills. If you spend YEARS not building stuff, then (shocker!) there are less people trained in how to do it, and less firms that do. You CREATE resource scarcity and cost by not investing.
Another great example of this is in transport infrastructure, where it's a MASSIVE problem. By some estimates, Crossrail had to spend 2 BILLION QUID building skills/resource back into the UK supply chain that no longer existed, because we'd paused big rail infra builds for years.
Finally: OPPORTUNITY. This is pretty straightforward - it's the chances you missed. Cheaper land is an obvious one, but ALSO sites permanently lost which became posh flats or supermarkets (stop selling your land TfL!)
Similarly: builds you could have piggybacked your work onto.
Similarly: builds you could have piggybacked your work onto.
Now obviously this thread is a MASSIVE oversimplification. But you should hopefully get the idea now. WHENEVER you see someone questioning the need to build/do something now, think:
Mitigation
Inflation
Opportunity
And ask yourself: is it REALLY the right decision to wait?
Mitigation
Inflation
Opportunity
And ask yourself: is it REALLY the right decision to wait?
Because this is why the country has gone down the shitter in lots of ways. It's why the NHS will cost so much to fix, why railways (particularly up north) will cost so much to fix, and why the housing crisis will cost so much to fix.
Because, for 30yrs or more, people have gone "oh, bit pricey right now, we'll sort that later"
And now, here we are, stuck with the consequences of that generational procrastination.
We can't change that, but we CAN grit our teeth, make the hard choice and say: It stops with us
And now, here we are, stuck with the consequences of that generational procrastination.
We can't change that, but we CAN grit our teeth, make the hard choice and say: It stops with us
ADDENDUM:
