The Government’s strategy for UK infrastructure, to be set out in the Budget, must deliver new thinking on how to unlock the long term sources of funding that will be needed to finance essential transport, energy, waste and water infrastructure projects, says the Institution of Civil Engineers (ICE) in its Budget Submission.
The calls follow confirmation from Economic Secretary to the Treasury Ian Pearson MP at an Infrastructure Funding Summit last week, that the Government will unveil its long awaited strategic approach to national infrastructure in the coming Budget, via the newly formed body Infrastructure UK.
Infrastructure UK is responsible for providing a long term view of the UK’s infrastructure needs and working across Government to prioritise investment for future UK projects. However ICE has raised concerns that infrastructure projects cannot be planned and prioritised until long term funding sources have been identified and secured.
ICE has been calling for the creation of a UK National Infrastructure Investment Bank or similar funding mechanism, as a way of attracting the large volumes of private capital which will be needed to fund the infrastructure projects that will underpin economic recovery and drive a low carbon agenda. The concept of such a bank has gained support from across the political spectrum.
The ICE Budget Submission delivered to HM Treasury today, explains how a National Infrastructure Investment Bank could operate and how it would complement other institutional reforms already in place.
ICE Director General, Tom Foulkes, said: "The effectiveness of initiatives such as Infrastructure UK, the reforms to the planning system and the Chief Construction Adviser will be greatly enhanced if new and innovative ways to fund the much-needed infrastructure can be unlocked and ongoing barriers to private investment are addressed. We hope the Government’s strategy, to be outlined in the Budget, will provide the crucial missing piece of the jigsaw."
"There is a requirement for up to £500bn* of investment in the UK’s infrastructure over the next decade, but Government will not have the resources to provide more than a fraction of that required investment. The private sector therefore needs to be encouraged and helped to fill the funding gap.
"We are confident that a new approach to financing vital infrastructure, via a mechanism such as a National Infrastructure Investment Bank, can work. Such a bank could ensure that essential infrastructure continues to be built, without diverting money away from front line public services."