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Pre-Budget Report: The verdict

The Pre Budget Report has established national infrastructure planning body Infrastructure UK to secure funds for major infrastructure over the coming 50 years, although some have queried where funds will be found.

The PBR has also boosted the wind sector, and confirmed money for Carbon Capture and Storage although other renewables sectors claim they have been sidelined.

Infrastructure UK welcomed

The Civil Engineering Contractors Association (CECA) Director Rosemary Beales said: “This is a further step towards the development of long term plans for investment in infrastructure.

“We are pleased that I-UK will be based in the Treasury with Paul Skinner at the helm. The new body will play a key role in partnership with the civils sector in developing a low carbon economy.

“The plans put forward in the Pre Budget Report are very encouraging. Bringing together the Treasury’s Infrastructure Finance Unit and the capabilities within Partnerships UK points towards an organisation that will focus on long term funding for much needed infrastructure investment and renewal.

“Innovative and secure ways to fund major infrastructure projects are needed. The ICE’s proposal for a National Infrastructure Investment Bank, which is supported across the sector, could offer both a predictable source of funding and help infrastructure projects to attract private finance. We hope this idea will go forward as well.

“We look forward to meeting Treasury officials soon to find out how the sector and I-UK can work together.”

Investment Question Mark?

ACE chief executive, Nelson Ogunshakin, said: “Today the Chancellor has acknowledged our calls for a strategic approach to the UK’s essential infrastructure. Our transport, water and energy networks are the life line of the UK economy and are too valuable to be allowed to develop piecemeal.”

“ACE believes questions still remain over the UK’s ability to fund the strategic improvements necessary. ACE recently suggested establishing special “infrastructure gilts” to help provide the necessary capital.

“There must be a serious cross-party commitment to reform the way we invest in these resources.  The water industry in particular is suffering due to the cyclical, short-term nature of capital investment. Failing to reform will have a detrimental impact on our ability to deliver world class, sustainable infrastructure.”

Renewables Partner for Grant Thornton’s Government and Infrastructure Advisory team, Nathan Goode, agreed, welcoming the formation of Infrastructure UK but said: “Meeting the low carbon agenda and a new high speed line from London to the West Midlands and beyond is expected to require in excess of £200bn of new funding.

“However, if investors are to be attracted to meet this gap, they require the Government to provide a clear strategy and supportive investment framework. The creation of Infrastructure UK working closely with the sponsor departments, represents a clear tick in the box. That the Government is looking to build on the successful track record of the UK in PFI/PPP will provide a further fillip to the infrastructure investment community.”

Executive director, Tarmac National Contracting Paul Fleetham, felt funding was absent from the report. “The Chancellor is quick to highlight investment in current road improvement schemes, but a lack of commitment to future road maintenance spending is of serious concern, particularly in relation to the deterioration of our road asset. 

“While Infrastructure UK undoubtedly faces tough decisions in advising Government of key infrastructure priorities, its strategy, which will be unveiled at the next Budget must recommend that adequate funding is put in place to tackle a national road maintenance problem which stems from years of under investment,”  he said.

Wind Boost

The British Wind Energy Association was happy that wind will continue to receive two Renewable Obligation Certificates (ROCs) per megawatt hour (MWh) to 2014, as announced in April’s budget.

BWEA Chief Executive Maria McCaffery MBE, said: “Keeping the 2 ROCs funding for offshore wind will help the UK retain its world lead and kickstart billions of pounds of investment ahead of the next major phase of offshore developments.

“There are up to 3000MW worth of projects which should now benefit from this new support - in the current economic climate this will make a vital contribution to inward investment and employment, as well as delivering on the 2020 targets,” she said.

Other Green industried disappointed

Policy Director of The Environmental Industries Commission, Danny Stevens, said: “The Government has missed yet another opportunity to radically reform fiscal policy in support of a green economic recovery. Whilst the Government’s commitment to an additional £400M investment in low carbon growth is welcome, it is only a small step forward. Huge strides still need to be made before the Government can confidently claim that it is putting the UK is at the forefront of a worldwide low carbon economic recovery.

“Whilst we recognise that the current political debate makes substantial “green new deal” investment in the UK difficult, we are disappointed that the Government has squandered an opportunity for a mini green stimulus - financed by efficiency savings, better application of the “polluter pays principle” and targeted allocation of existing public sector funds. This level of investment is essential for driving the transition to a global green economy – with UK businesses and jobs at its heart.

“The Pre Budget Report also shows a rather narrow understanding of the economic opportunities of environmental protection. By focusing investment on “low carbon” growth at the expense of other, equally important, environmental and sustainability issues, the Government is effectively surrendering a $3trillion global environmental marketplace to our more far sighted international competitors who recognise the significant economic benefits of environmental protection.”

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