The report, on Capacity and Skills, highlights how uncoordinated planning of infrastructure projects discourages industry investment in civil engineering capacity and skills – and fails to deliver best value to the taxpayer.

According to the report, construction inflation has been running at a rate well above the Consumer Price Index (CPI), the measure used by Government to calculate inflation across the economy as a whole. The ICE has calculated that, if left unchecked, this gap will have reached nearly £8bn  by 2015. Inflation on this scale threatens vital investments as government, by far the biggest client for infrastructure, only allows for CPI inflation in its future spending plans.

Keith Miller, from ICE, commented: “The UK civil engineering industry is facing a capacity and skills crisis due to a boom in infrastructure investment. If the costs of delivering vital water, energy, waste and transport infrastructure rise, essential projects could be scrapped leaving the public at a loss.

“The UK ’s stop-start and fractured approach to infrastructure planning erodes the industry’s confidence to invest in developing capacity, innovation and civil engineering skills. This feeds into higher construction inflation, and misses an opportunity to get best value at a time of increasing global demand for resources.

“ICE’s State of the Nation Report shows how successful partnerships and collaborative working across the industry can tackle these issues. There has rarely been a better time to be a civil engineer.”

In its report, ICE is calling for an independent commission to take a strategic overview of all major infrastructure projects and coordinate their delivery. ICE endorses the work of Northern Ireland ’s Strategic Investment Board which has successfully enabled Government and industry to work together to deliver major infrastructure that benefit the public.

ICE’s report identifies how the current system allows Ministers to make political decisions to cut spending individually, without considering how it will affect other related services. An example was Defra's cut of £80 million in the Environment Agency budget in 2006 -07 due to problems with farming budgets which resulted in cutbacks in flood risk management funding.