In the 2010 Budget, the Chancellor of the Exchequer, Alistair Darling, promised £100 million to fill the nation’s potholes. But in case you think that this is the limit of his ambitions for investing in our economic infrastructure, he also published a strategy for securing as much as £1 trillion of investment in other holes in the fabric of the nation’s economy.
In the little-noticed Strategy for National Infrastructure, the Government outlined how it will attempt to secure the £40-£50 billion annual infrastructure investment needed over the next 20 years. There is a significant risk of a gap emerging in the funding of large infrastructure projects and, as I discussed in an earlier blog, the Government has established Infrastructure UK to address this.
If the £1 trillion is to be found and deployed effectively, it is important that businesses engage with the Government as it fleshes out its strategy.
The Government wants to stimulate investment, primarily from the private sector across five sectors that contribute directly to economic growth; energy, transport, water, waste and communications. This will cover assets such as waste treatment centres, rail, ports, roads, gas storage, recycling facilities, electricity generation and distribution, and telephone, TV and radio networks.
So far, the strategy is all about process rather than substance.
Infrastructure UK will manage the establishment of the proposed Green Investment Bank with public and private funding of £2 billion to invest in the low carbon sector with a particular focus on energy and transport projects. A consultation on this will be published in the summer.
And there’s more. There will also be a National Infrastructure Framework by the end of 2010 with departmental supply chain analyses; a report on the costs of large-scale civil engineering works by the end of 2010; an action plan on public-private interdependencies by 2011; and an Infrastructure Technology Strategy by 2011. Zzzzz…
The people drawing up this strategy clearly haven’t read my colleague Steve’s blog on why we take so much longer than the French to complete large infrastructure projects. And rather worryingly, the strategy document says that the Government will consider whether, not just how, to give longer-term certainty to public spending on infrastructure.
But at least it’s a start. The Government may be long on process but businesses involved in infrastructure provision should nevertheless engage with the policy makers drawing up these strategies and frameworks. Decisions will be made on investment priorities, changes to the regulatory environment and project financing. If nothing else, these initiatives give business the opportunity to put forward their views on what changes should be made across a whole swathe of policy to facilitate this investment.
A change of government won’t make any difference to this imperative as the need for investment in our infrastructure won’t end on 6 May. The holes need filling and that will require pots of money.