While ICE welcomes the £3bn per year boost in infrastructure, we need real, visible progress of the National Infrastructure Plan and fewer re-announcements.
Increased spending on infrastructure
The Chancellor announced an additional £3billion per year spending on capital infrastructure projects from 2015, mainly for road and rail networks. While this is welcomed, there is a concern that this won’t deliver immediate growth or address the danger of industry capacity being permanently lost.
Improving effectiveness of infrastructure delivery
A £3bn a year boost for public infrastructure investment, despite it not being available until 2015, is a positive and welcome move, as are plans to boost Whitehall’s capability to deliver major infrastructure projects.
However, Government must look at how it can better attract private investment into infrastructure and show visible progress and fewer re-announcements on existing initiatives.
Nick Baveystock, ICE Director General
There was a positive move in addressing the effectiveness of infrastructure delivery, with the announcement of a series of reforms.
Commercial infrastructure specialists employed within Infrastructure UK will be deployed into projects across Government.
Another measure will see the establishment of tough new Infrastructure Capacity Plans by the summer to drive forward progress in key Government departments.
Enabling investor confidence
The Chancellor also committed to 'ensuring that investors have the conﬁdence to make long-term decisions on major infrastructure projects' – which ICE has long been calling for. The Government will therefore look to make more use of independent expertise in shaping its infrastructure strategy, giving ICE the opportunity to provide that expertise.
Commitment to energy
There has been some positive news on energy, with the announcement that two Carbon Capture and Storage (CCS) projects will be taken forward. This represents the next step in the £1 billion CCS commercialisation programme - another long term ICE call to move towards sustainable, low carbon energy supply.
This, along with the announcement of planning permission for nuclear power plant at Hinckley Point and a commitment to develop shale gas, are steps towards securing long term energy supply for the UK.
What ICE said
Commenting on the Budget, ICE Director General Nick Baveystock said:
'A £3bn a year boost for public infrastructure investment, despite it not being available until 2015, is a positive and welcome move, as are plans to boost Whitehall’s capability to deliver major infrastructure projects. If we are to deliver existing projects more effectively and generate short term growth quickly, this is vital.
'However as Government itself acknowledges, 70% of investment in UK infrastructure will come from private investors and owners and Government must not lose sight of the scale of this challenge. The drawn out process of the Electricity Market Reform, and the scaled down hopes for investment from sources such as pension funds, show there is an urgent need for Government to improve its role as a facilitator of investment. We therefore welcome Government’s commitment to consider options for using independent expertise to help shape it’s strategy – and urge them to engage with the work of Sir John Armitt’s independent review which is looking at this issue.
'We would also like to see real, visible progress and fewer re-announcements on existing initiatives – such as the projects identified as receiving assistance under the infrastructure guarantees scheme and the level of funding available through the Pensions Investment Platform.'
Read our full assessment of the 2013 Budget including analysis of the Chancellor's announcements compared to our calls.