The engineering body has been calling for an infrastructure funding unit for some time, as a way of attracting the large volumes of private capital needed to fund the transport, energy, water and waste projects that will boost UK competitiveness and drive a low carbon agenda. The concept of such a unit has attracted support from across the political spectrum as it would ensure essential infrastructure continues to be built, without putting undue strain on the public purse.
In a recent speech, Lord Mandelson, secretary of state for business, set out the government’s commitment to ‘regenerating Britain’s infrastructure for the twenty first century’ which included examining the case for a public-sector backed financial institution.
Ian Pearson, economic secretary to the Treasury, has also confirmed that the treasury is looking at ways to finance UK infrastructure needs, including the possibility of a National Infrastructure Investment Bank. He said government will unveil its strategic approach to national infrastructure in the coming budget, via Government Body Infrastructure UK.
Tom Foulkes, director general of ICE, said: “The government is paving the way for a range of important infrastructure projects – from high speed rail to a new generation of power stations, but it needs to deliver new thinking on how to unlock the long term sources of funding needed to finance these projects. A GBP2bn fund for green projects is welcomed, but unfortunately it will not be anywhere near enough.
“We have seen improvements to the planning system, a new chief construction adviser and Infrastructure UK has been established to provide a long term view of the UK’s infrastructure needs and prioritise investment for future projects. However infrastructure cannot be planned and prioritised until long term funding sources have been identified and secured. Clearly a funding unit such as a National Infrastructure Bank would greatly enhance the initiatives already in place.
“We are still hopeful for a positive announcement relating to National Infrastructure Investment Bank, or similar funding mechanism, in the budget. Such a bank will finally deliver a sustainable funding solution for future infrastructure.”
