Calls to protect investment in vital infrastructure and create a national infrastructure investment bank, were stepped up this week when the ICE delivered its pre-budget report submission to the Chancellor.
The submission, which includes new in-depth research on infrastructure funding in the UK, follows recent warnings from the Confederation of British Industry (CBI) and the British Chamber of Commerce (BCC) that cutting spending on roads, railways and power stations, to bring debt levels down, will delay economic recovery.
The ICE’s commissioned research provides a strong case for such a bank, to ensure vital infrastructure projects such as high speed rail and a new generation of power stations get the funding they need. This is especially important during a downturn when investment in infrastructure is cut back due to strain on the public purse and increased pressure to deliver value for money on infrastructure projects.
“It is vital that we find a way of ensuring that sufficient, long term funding is available to develop our transport, energy, water and waste management networks.”
ICE president Paul Jowitt
The concept of the bank has gained support from a range of figures across the political spectrum, including former EU transport commissioner Neil Kinnock, Liberal Democrat deputy leader and shadow chancellor Vince Cable MP, author/economist Will Hutton and right-leaning think tank Policy Exchange.
The research, carried out by Loughborough University, justifies the need for continued investment in infrastructure. It also explains the shortfalls in the current infrastructure fundingpractices and how the bank could offer a solution.
ICE president Paul Jowitt said: “It is vital that we find a way of ensuring that sufficient, long term funding is available to develop our transport, energy, water and waste management networks − on a continuous basis and at an acceptable cost to consumers.
“Such a bank could operate like the European Investment Bank (EIB), raising money from the international money markets, whilst being underwritten by the government. This would mean it could lend at lower rates of interest, holding down the cost of capital for borrowers. Like the EIB, a national infrastructure investment bank would provide much needed access to funds for infrastructure projects and lessen the pressure on public generated funds by actively facilitating private investment.
“This is not about the government spending money. It is about saving money in the long term, whilst ensuring a secure source of funding for crucial infrastructure projects that will aid the transition to a low carbon economy and strengthen UK competitiveness.
“As the CBI and BCC have also rightly acknowledged, a government determined to make a success of the future UK economy must protect investment in its critical infrastructure,” said Jowitt.
- ICE made their pre budget submission on Tuesday − view the research at: www.ice.org.uk/funding