Government should seek to attract greater private sector investment in infrastructure to help spur the UK’s economic recovery from the Coronavirus crisis at a time when public spending is severely stretched, a new report urges.
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The Confederation of British Industry warns that the financial strain on the country resulting from Covid-19 must not be allowed to derail infrastructure spending ambitions.
Although the Government has reiterated promises of an ‘infrastructure revolution’ and pledged more than £600Bn of spending over the next five years at the March Budget, the CBI highlights a need for greater private sector involvement.
“While the UK Government’s commitment to delivering infrastructure remains undeterred, the country’s fiscal position has substantially worsened,” said the group’s chief UK policy director Matthew Fell.
“In this context, the private sector now has an even more important role to play in helping to bridge the funding gap needed to deliver the Government’s vision for UK infrastructure.”
CBI’s ‘Investing in infrastructure’ report calls on the Government to reinvigorate the UK infrastructure market and make private financing more attractive by tackling concerns about regulation and a lack of clarity about pipeline opportunities.
A key recommendation is to create a new UK infrastructure bank after Brexit which could focus on “crowding in” private finance. The report also calls for additional powers to be handed to the National Infrastructure Commission and the Infrastructure & Projects Authority (IPA to hold the Government to account more on infrastructure delivery.
It also urges the IPA to develop a set of principles and guidance to support central Government departments in bringing forward ‘market led’ proposals for delivering major public sector projects. The report adds that the National Infrastructure & Construction Pipeline should be reformed to boost confidence in the market and provide clarity about opportunities for potential private sector investors.
Commenting on the report, audit firm KPMG’s global head of infrastructure Richard Threlfall said: “Carefully prioritised infrastructure investment will stimulate economic growth and help create a fairer, more resilient and sustainable economy.
“But with constrained public finances, now more than ever, we need to attract private finance, both from the UK and from inward investment.”
(Photograph: Crossrail)
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