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Cameron must back up George Osborne’s initiative

Antony Oliver

Having been banging on in this column for the best part of the last two years about the infrastructure investment being key to economic growth, it is, of course, great to hear chancellor George Osborne talking straight and hard this week about the need to kick start investment in the nation’s vital infrastructure.

“We have to do more and we have to do it faster,” he told the BBC on Sunday, promising fast track legislation to underwrite £40bn of important infrastructure schemes and a Bill to clear away unnecessary planning delays.

Well absolutely. And few in the industry would disagree that greater and sustained effort to actually bring the huge number of nationally important projects to the start line is crucial.

As is highlighted by several industry commentators this week, the newly named Infrastructure (Financial Assistance) Bill will be a very important tool to remove financing risk and enable potential clients to drive projects forward. Anything that speeds up the process of closing financing deals must be hugely beneficial to scheme progress.

Yet as they also point out, for all the good that this Treasury initiative brings, the reality is that there are still simply not that many infrastructure projects in the pipeline that are sufficiently close to the start line to really make use of this new facility.

Osborne’s stated criteria for eligible projects to be “nationally significant”, financially credible and good value for taxpayers is one thing. Ready to start construction within 12 months is frankly a different matter entirely.

Well meant ambition

And, for all the Treasury’s well-meant and laudable ambition, it is hard to see how, housing projects aside, the weekend’s announcements will materially accelerate investment in the critical energy, transport or water projects that the UK is crying out for.

Financing is certainly a very important aspect of the infrastructure delivery process - not least given economic conditions. But it remains simply one element of the overall solution.

As Osborne identifies, alongside financing sits planning reform as another critical element to resolve. It is one that the forthcoming Economy Bill and its promise of yet more liberalisation to speed planning must sure help.

But ultimately, actually turning the well thought out, nationally significant projects set out in the last two National Infrastructure Plans into reality requires two other critical elements to materialise.

The first is policy. When it comes, in particular, to renewable energy, nuclear power, air transport, highways, urban regeneration and waste there is still too little clear and stated government ambition. The second, perhaps more important element, is strong, decisive - and possibly even democracy challenging and unpopular - decision making to underpin that policy. And that has to come from the top.

Osborne has made a start. David Cameron’s task must be to ensure that other government departments fall in line and green-light projects for the Treasury to potentially underwrite.
n Antony Oliver is NCE’s editor

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