Quite a package of interventions but an overall infrastructure vision is still missing, says Richard Threlfall, KPMG’s UK head of infrastructure
Major government announcements on the economy, infrastructure and construction are usually something of a footnote - but this week it was different.
Infrastructure investment took centre stage in the autumn statement as the government’s antidote to lower growth forecasts and rising unemployment. The industry may remain sceptical about how quickly any of it will have an effect, but at least we feel loved.
None of the long list of schemes reeled off with relish by the chancellor are new in conception, but the government’s decision to reduce revenue spending and increase capital by £5bn over the next five years will allow a number of schemes to go ahead which had previously been frozen. The National Infrastructure Plan 2011 proudly lists over 500 schemes in the pipeline and 40 priority investments - a mix of specific schemes and some overarching programmes.
A host of other measures were set out by the chancellor which together comprise quite a package of interventions and stimulus in the UK construction market. An additional £1bn to go into the Regional Growth Fund, supporting smaller scale local schemes; £1bn of additional borrowing by Network Rail for rail schemes; a £400m fund for new housing starts to be funded from council house purchases; two new Enterprise Zones in Humberside and Lancashire and 100% capital allowances for certain Enterprise Zones.
The much trailed £20bn target investment of UK pension funds in UK infrastructure was touched on quite briefly, but not surprisingly. The government has in place its Memoranda of Understanding but no detail at all as to how this will work. Still, the aspiration is a good one.
So at least we now have a pipeline of projects, measures and commitments from the government to see them delivered. What is still missing is an overall infrastructure vision for the country that explains how the individual schemes relate to each other and secure the UK’s economic position in the global economy. Perhaps if we all ask nicely we will get that next year.