Two weeks ago ICE director general Tom Foulkes highlighted to NCE the vast amount of delicate work that has been going on behind the scenes to help government understand the value to the economy of investment in infrastructure.
This week we see clear evidence that this work is now bearing fruit with the Chancellor’s announcement of a £30bn plan to boost the nation’s key infrastructure projects.
NCE went to press this week ahead of George Osborne’s Autumn Statement to Parliament. As such we have not yet seen the full detail of the new National Infrastructure Plan or how it will be delivered.
However, on the basis of leaks and briefings by chief secretary to the Treasury Danny Alexander it would appear very positive indeed. The promised £5bn of immediate Treasury commitment to infrastructure projects really is, as this week’s cover suggests, an early Christmas present for the industry.
It seems that the government has been listening to our very sensible assertion that investment in infrastructure is the surest way to deliver growth and jobs into the economy.
But more than that, the promise of £5bn direct from existing Treasury resources right away demonstrates that it is also heeding the industry’s calls for stimulus “in the here and now” (NCE 27 October).
“It seems that the government has been listening to our very sensible assertion that investment in infrastructure is the surest way to deliver growth and jobs into the economy”
The mooted list of projects to benefit from the stimulus shows a much needed boost in particular to the hard hit highways sector over the next couple of years. However it also reaches across sectors and so should provide a welcome lift throughout the supply chain.
We must keep an eye on the longer term. Here there is much work to do to ensure that the plan to lever in another £20bn or more of private cash can be turned into reality.
Alexander may have noticed that Birmingham Airport’s new runway is funded by Canadian and Australian pension funds, but to most in the market this is not news.
The real question for those potential funds remains around how the Treasury will make such public infrastructure projects more attractive to investment and perhaps more pertinent, what the revenue model will be.
This week, the Highways Agency is already preparing to get itself into shape for this new paradigm of privately funded infrastructure.
Similarly, as we saw last week, Network Rail is also restructuring to get in shape for true private sector competition to both bring down the cost of infrastructure but also lever in new private sector investment models.
The message is clear from across the industry − with political support, the solutions to the nation’s infrastructure and economic problems are at hand. This week government appears to be listening and putting infrastructure firmly on the Cabinet table.
- Antony Oliver is NCE’s editor