Chancellor Rishi Sunak confirms the location, role and goals of the bank.
Infrastructure formed an important part of Chancellor Rishi Sunak’s 3 Point Plan - “building our future economy” - in his Budget announcement today.
Alongside the Budget, there was further detail on the mandate and design of the new UKIB, plans for a new National Infrastructure Commission study into the regeneration of our towns, guidance on how local areas can submit bids for the Levelling Up Fund and the ‘Build back better’report’s Plan for Growth.
More detail on the UK Infrastructure Bank
The chancellor confirmed that the new UKIB will be based in Leeds and will finance a “green industrial revolution”.
The UKIB will extend loans, equity financing and guarantees to fund infrastructure projects that support net zero and levelling up. It will be given an initial £12bn to finance loans and equities for the next five years and will also take over the £10bn UK Guarantees Scheme.
ICE welcomed the UKIB, which meets previous ICE calls for a UK infrastructure investment bank that has a mandate to invest to support regional growth.
Town regeneration and ‘Levelling-up’
Also announced was a request for the National Infrastructure Commission to look at the link between infrastructure investment and town regeneration through a new evidence-based study. £1bn was allocated to 45 new towns deals in England, with three accelerated Scottish City and Growth Deals and three in Wales.
The chancellor also provided more detail on how to bid for ‘levelling-up’ funds – but clarity on the outcome being targeting through ‘levelling-up’ is still needed, as ICE outlined last year in the results of call for evidence.
Support for net-zero
Aiming to fill in the gaps of the ‘Build Back Better’ mantra was the revised Plan for Growth, which set out the government’s plans to support growth through investment in infrastructure, skills and innovation, as well as support for the transition to net-zero.
Further support for the ‘green recovery’ was new port infrastructure that will build the next generation of offshore wind projects in Teesside and Humberside, and a new retail savings product that will give savers the chance to support green projects.
Responding to the chancellor's speech to the House of Commons, ICE’s Director of Policy Chris Richards, said: “If the government wants to make real headway on their levelling up agenda, they will need to take a radical approach to fixing the problems that hold back parts of the country from realising their economic potential.
“The UK Infrastructure Bank will move us closer to addressing those problems, but only if it is given the mandate to take a trial-and-error approach to ideas from local and regional leaders. As the government develops the scope of the bank, prioritising the delivery of outcomes from day one, not prudent financial management, should be the main effort.”
Look out for more detailed analysis of what the Budget means for infrastructure in ICE's Infrastructure Blog soon.