Chancellor pledges £100bn of infrastructure spend in speech in York
Chancellor George Osborne has committed to the government spending £100bn on infrastructure during the course of this parliament, as he launched an eight-strong National Infrastructure Commission.
In a speech in York today alongside National Infrastructure Commission (NIC) chairman Lord Adonis, Osborne pledged to “get Britain building” and to put infrastructure spending at the heart of the autumn statement next month.
A “suite of asset sales” from the Treasury will help fund major infrastructure projects, Osborne said.
The Treasury will hope the announcement will ease fears of a slowdown in the construction sector, after the Office for National Statistics this week reported its first quarterly fall in output for more than two years. Building reveals today that the Construction Products Association plans to downgrade its output forecast for the construction industry this year.
The full eight members of the NIC are:
- Lord Heseltine – the former deputy prime minister who has long championed the regeneration of Britain’s inner cities through infrastructure investment
- Sir John Armitt – the former chair of the Olympic Delivery Authority, and next year’s President of the Institute of Civil Engineers (ICE)
- Professor Tim Besley – a former member of the Bank of England’s Monetary Policy Committee and the LSE’s Growth Commission, which recommended an independent infrastructure body
- Demis Hassabis – artificial intelligence researcher, neuroscientist and head of DeepMind Technologies
- Sadie Morgan – a founding director of dRMM Architects and Design Panel Chair of HS2
- Bridget Rosewell – a senior adviser at Volterra and former Chief Economist and Chief Economic Adviser to the Greater London Authority
- Sir Paul Ruddock – chairman of the Victoria & Albert Museum and the University of Oxford Endowment
The commission will produce a report at the start of each five-year Parliament, offering recommendations for priority infrastructure projects.
The government has said the NIC’s initial focus will be in three key areas, which are:
- northern connectivity, particularly identifying priorities for future investment in the North’s strategic transport infrastructure to improve connectivity between cities, especially east-west across the Pennines
- London’s transport system, particularly reviewing strategic options and identifying priorities for future investment in large scale transport improvements – on road, rail and underground – including Crossrail 2
- energy, particularly exploring how the UK can better balance supply and demand, aiming for an energy market where prices are reflective of costs to the overall system
The chancellor said: “This is about jobs, growth, living standards and ensuring Britain is fit for the future. We must be the builders.
“At the Spending Review, I will commit to investing £100bn in infrastructure over the next five years and we are creating an independent commission to give us a long-term, unbiased analysis of the country’s major infrastructure needs.”
Commenting on his appointment to the commission, incoming president of the ICE, Sir John Armitt, said: “I am very pleased to be invited to join the Commission. The NIC is something I have advocated and believe in - it is a means of ensuring we have longer term thinking when it comes to the development of UK infrastructure.
“Importantly, it also opens up the infrastructure debate, so we can ensure decisions are based on broad, unbiased evidence on the UK’s needs for the coming decades.
“I am keen to get started, and look forward to working with Andrew and the other Commissioners, who bring a wealth of knowledge and expertise to the table.”
Richard Robinson, chief executive of civil infrastructure in Europe, Middle East, India and Africa for Aecom, said:
“The Chancellor’s commitment to putting infrastructure at the heart of the Spending Review is welcome news, along with a £100 billion pledge on infrastructure spend by 2020.
“However, it is not yet clear if this is confirmation that all transformative existing programmes currently in their early stages will be funded. This confirmation would demonstrate long-term vision and real recognition that infrastructure investment fuels economic growth, helping the UK compete on the global stage.
“The launch of the National Infrastructure Commission is welcome news but it must be granted the necessary binding decision-making powers to initiate projects. Industry optimism will be short-lived if it becomes a long-grass forum into which politically charged decisions are kicked.”
Alasdair Reisner, chief executive of the Civil Engineering Contractors Association, said:
“We have long called for a long-term strategy to ensure the UK’s infrastructure truly meets the expectations of business and the general public, and we welcome the establishment of the National Infrastructure Commission and today’s expert appointments which will deliver world class projects across the UK.
“The Commission will be able to analyse the strategic opportunities and challenges facing the UK, identify the best way to respond, and then ensure projects are delivered on time and on budget.
“The construction industry welcomes today’s announcements and looks forward to supporting the Commission over the coming years.”
Amanda Clack, RICS president elect, said:
“We would like to congratulate Lord Adonis on all of his initial appointments to the National Infrastructure Commission, and in particular Sir John Armitt, who clearly articulated the need for the commission in the first instance. That these key appointments were announced within a month of forming the Commission demonstrates clearly the Government’s commitment.
“Of course the next challenge facing the Government and the NIC is the ability to finance the National Infrastructure Plan and to provide clarity on prioritisation of projects within that Plan.”