04.12.13
Government launches £66bn investment in infrastructure
Energy, transport, communications and water projects costing £346bn to 2030 will be funded in the new National Infrastructure Plan (NIP), published by government today.
The government will increase investment in infrastructure by £66bn, and six big insurance companies will also provide £25bn over the next five years.
The plan includes a further £50m for development at Gatwick Airport railway station, a government guarantee to support finance for a new nuclear power station at Wylfa, confirmed UK guarantee for the £1bn Northern Line extension, funding for improvements to the A50 and A14, and the sale of the government’s shareholding in Eurostar.
Increasing private capital in the Green Investment Bank will also be looked into, and the plan sets out an aim to make the UK a world centre for testing and development of driverless cars. A £10m fund will open in 2014 to test solutions to deliver superfast broadband services to the most difficult to reach areas and the government will also invest £5m in a pilot to convert public sector car fleets to electric vehicles.
Chief Secretary to the Treasury Danny Alexander said: “The announcement today that six major insurers will invest £25bn over the next five years is a massive vote of confidence in the UK economy. It supports the wider £100bn public investment to rebuild Britain over the next seven years that I announced at the Spending Round 2013. Underground, overground, on shore, offshore, wired or wireless, tarmac or train track. You name it, we’re building it right now.
“This is great news for the people of the UK because after years of neglect, the UK’s energy, road, rail, flood defence, communications and water infrastructure needs renewal. It will boost the UK economy creating jobs and making it easier to do business. It will also make the UK a better place to live for everyone who calls it their home.”
Commercial Secretary to the Treasury Lord Deighton said: “The fourth National Infrastructure Plan shows that the government is delivering on infrastructure, with a long term strategy to make sure the UK tackles decades of underinvestment and gives us the infrastructure we need to compete in the global race.”
“Investment is increasing to around £375bn over the coming years, with 45% of our prospective infrastructure already under construction. We’ve set out government priorities with clear delivery milestones and reformed planning rules to drive forward the most important projects, making sure we are building the strong, modern economy of the future.”
Otto Thoresen, director general of the Association of British Insurers, said: “Insurers have a key role to play in contributing to the UK’s economic growth, as providers of long-term capital investment. Providing capital for infrastructure projects will help drive a competitive, healthy and resilient UK economy.”
But Chris Leslie MP, the shadow Chief Secretary to the Treasury, said: “For the last three-and-a-half years the Government’s record on infrastructure has been one of complete failure.
“Scheme after scheme has been announced to great fanfare but then little actually delivered. Yet another announcement from ministers about possible future investment will do little to reassure business that warm words will finally translate into diggers in the ground.”
Katja Hall, CBI chief policy director, said: “We’ve been calling for a more focused approach on infrastructure projects and look forward to seeing the Fourth National Infrastructure Plan. As ever the devil will be in the detail on timelines and delivery.”
She added: “With the majority of national infrastructure projects earmarked to be delivered by the private sector, the insurance industry’s £25bn investment is good news.
Institution of Civil Engineers (ICE) director general Nick Baveystock said: “The National Infrastructure Plan plays a critical role in enabling the UK to compete in a modern world, creating jobs and growth and providing the stability for the UK to grow its engineering skills and capacity. Previous editions of the Plan have set out a much-needed and welcome vision for infrastructure, but the need for it to evolve into a robust delivery plan – aligned with the UK’s strategic goals – has become more pressing. The new 2013 Plan, with its updated pipeline of projects, further £25bn investment and evidence of a shift to “delivery mode”, is a positive step and presents us with an opportunity to drive this agenda forward.”
Nick Prior, head of infrastructure at Deloitte, the business advisory firm, said: “The additional infrastructure funding announced by the Chief Secretary today is welcome but we need much clearer sight of where this money will actually be spent.
“The government guarantees scheme is making a difference. This has been the most impactful announcement on infrastructure to date. But the reality is little of this money will be spent this side of 2015, so we won’t see shovels in the ground on new projects for some time.
“The £25bn commitment from insurers is good news in demonstrating the attractiveness of UK infrastructure to investors. But they still need to see a clear pipeline of opportunities to put their money into and this will require some upfront commitment and ongoing funding from government. The intention is there but the funding is still aspirational.”
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