A £2bn green investment bank would be a good move, but not enough to plug a £500bn infrastructure funding ‘gap’ over the next decade according to the ICE.
Both the Conservatives and Labour seem to have settled on the concept of the Green Investment Bank, Labour using the proceeds from the sale of the Channel Tunnel Rail Link and the unspent money from the Treasury’s £2bn PFI Infrastructure Funding Unit.
ICE welcomed the concept of the Green Investment Bank but said a National Infrastructure Investment Bank would be needed to attract some £500bn of investment needed over the next decade.
ICE Director General, Tom Foulkes, said: “The Government is paving the way for a range of important infrastructure projects – from High Speed Rail to a new generation of power stations, but it needs to deliver new thinking on how to unlock the long term sources of funding needed to finance these projects. A £2bn fund for green projects is welcomed, but unfortunately it will not be anywhere near enough.
“We have seen improvements to the planning system, a new Chief Construction Adviser and Infrastructure UK has been established to provide a long term view of the UK’s infrastructure needs and prioritise investment for future projects. However infrastructure cannot be planned and prioritised until long term funding sources have been identified and secured. Clearly a funding unit such as a National Infrastructure Bank would greatly enhance the initiatives already in place.
“We are still hopeful for a positive announcement relating to National Infrastructure Investment Bank, or similar funding mechanism, in the Budget. Such a bank will finally deliver a sustainable funding solution for future infrastructure,” he said.
In a recent speech in Manchester, Secretary of State for Business Lord Mandelson set out the Government’s commitment to “regenerating Britain’s infrastructure for the twenty first century” which included examining the case for a public-sector backed financial institution.
Economic Secretary to the Treasury Ian Pearson has also confirmed the Treasury is looking at ways to finance UK infrastructure needs, including the possibility of a National Infrastructure Investment Bank. He said Government will unveil its strategic approach to national infrastructure in the coming Budget, via Government body Infrastructure UK.