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- By Andy Smith
Private investors can be a major driver in a plan to revitalise UK roads, railways and housing at a time when public funds are stretched by covid-19 support measures.
That’s the message from a new report by the Confederation of
British Industry (CBI), which warned that the financial strain from covid-19
must not be allowed to derail plans unveiled by the government in March’s Budget
to spend £640bn on infrastructure.
The report, Investing in infrastructure, published by the CBI today (7 September) highlights the role that private finance can play in delivering on these promises.
Key among its recommendations is – in the event the UK
ends its participation with the European Investment Bank, which provides
infrastructure funding – for the government to create a UK infrastructure bank
to help deliver infrastructure and support the economic
The report outlines the proposed bank’s role of
focusing on drawing in private finance by reducing risks, promoting market
stability, and increasing investor confidence.
Other recommendations include giving additional powers to the National Infrastructure Commission and Infrastructure and Projects Authority – offering them greater independence and authority to hold government to account on infrastructure delivery – and reforming the National Infrastructure and Construction Pipeline to boost confidence in the market and provide clarity about opportunities for potential private sector investors.
Construction enables economic growth
CBI research shows infrastructure investment is a key
enabler of economic growth, and that for every £1 spent on construction
activity, £2.92 is created in wider economic benefit.
Matthew Fell, chief UK policy director at the CBI, said:
“Prior to the outbreak of covid-19, businesses welcomed the government’s
commitment to deliver an ‘infrastructure revolution’ and interpreted it as
a clear sign that the government was serious about delivering on its
“While the UK government’s commitment to delivering
infrastructure remains undeterred, the country’s fiscal position has
substantially worsened. 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.
“To support its ambitious infrastructure agenda and provide
better connectivity, at good value for taxpayers, the government must
reinvigorate the UK infrastructure market tackling concerns about regulation
and a lack of clarity about investment opportunities.
“The government must commit to an approach
that gives confidence to investors and capitalises on the
attributes of businesses and public sector establishing itself once again as a
world class destination for investment.”
Guy Thompson, director of environmental futures, Wessex Water added: “As a private company delivering essential services, Wessex Water welcomes this timely paper from the CBI.
“We need to invest more in essential infrastructure and to take a long-term view on that investment. The focus on a green economic recovery from the Covid crisis presents an opportunity to build infrastructure that is more resilient in the face of climate change and other environmental pressures.”