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The Association for Consultancy and Engineering has welcomed the announcement of financial support for infrastructure investment in the Chancellor’s autumn statement.
The Chancellor of the Exchequer set out plans to provide £5billion into infrastructure investment from savings over the next three years, with a further £1billion through Crossrail and an additional £5billion guaranteed through tax incremental financing, and will secure private sector investment in infrastructure as the government looks to secure growth in the economy. The move will see private funds provide £20billion over several years to support investment in infrastructure in return for long term returns. The government will facilitate this by guaranteeing the loans and accepting the construction risk.
It was also announced that a rebalancing of funds towards capital budgets to bolster infrastructure spending so as to further drive growth, and £20billion of guaranteed loans to SMEs through a National Loan Guarantee, with the prospect of this doubling in future. There will also be a business finance partnership to help medium sized firms.
ACE chief executive, Nelson Ogunshakin OBE, said: “We are pleased that government has listened to the collective voice of industry and reflected that in its autumn statement. Infrastructure is the key driver for economic growth and can provide a significant return for the investment required. Crossrail alone offers the prospect of up to a £67 billion return for the UK economy.”
“The country is facing a £434 billion infrastructure shortfall by 2020 and is now ranked 28th in the world, while our nearest competitor France is ranked third. We are very pleased to see the announcements through National Infrastructure Plan 2 further strengthen infrastructure activity. Some certainty for the future was generated through £5billion made available in the next spending period and a list of 500 projects for the next ten years and beyond.
“There is also the prospect £20billion provided through private sector institutional investors, however, how this will overcome investor concerns about construction risk has not yet been fully answered. Also, the extent to which the agreement with investors fully secures this amount remains to be seen.”
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Notes to editors
• Total user and welfare benefits from Crossrail will range between £30bn-£42bn and the economic benefits between £36bn-£67bn.
http://www.acenet.co.uk/infrastructure-a-case-for-funding-2010/301/12/1/8
• ACE’s infrastructure analysis report found that larger construction generally provide returns 2-5 times that of the initial investment, whereas smaller ‘congestion relieving' projects can provide returns beyond this range significantly spurring economic growth.
http://www.acenet.co.uk/infrastructure-a-case-for-funding-2010/301/12/1/8
• Policy Exchange's Delivering a 21st Century Infrastructure for Britain report stated that Britain has an infrastructure deficit requiring at least £434 billion of new investment by 2020.
http://www.policyexchange.org.uk/images/publications/pdfs/Delivering_a_21st_Century_Infrastructure_for_Britain_-_Sep__09.pdf
• The World Economic Forum rated the UK 28 in the world for infrastructure in their Competitiveness Report 2011–2012 http://www3.weforum.org/docs/WEF_GCR_Report_2011-12.pdf
Quality of overall infrastructure 28th
Quality of roads 26th
Quality of railroad infrastructure 19th
Quality of port infrastructure 17th
Quality of air transport infrastructure 24th
Available airline seat kms/week, millions 3rd
Quality of electricity supply 9th
Fixed telephone lines/100 pop 9th
Mobile telephone subscriptions/100 pop 27th
For media inquiries please contact Gavin Pearson (gpearson@acenet.co.uk) (020 7202 0255)
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