Dr Vince Cable has told ACE’s Annual Conference that there is a good long term and short term cause for government’s growing interest in infrastructure.
The UK is a long way down international tables for the standard of its infrastructure and this is holding back UK productivity. At the same time getting projects off the ground soon could play a big part in generating growth that the UK economy needs after tough economic times.
The demonstration of commitment from government, he said, was the support for major proposals such as HS2 along with a great many smaller projects that can help to resolve bottlenecks and that see work started quicker.
Dr Cable noted that to get projects underway there would need to be the development of new financing models, and that these would not be developed primarily by government but by industry. As part of this new sources of finance such as pension funds will need accessing to help finance infrastructure, while conventional PFI would need to be replaced.
He suggested that we could see government put in matching finance to help get big projects underway. In this regard we have seen the launch of the Green Investment Bank which will use £3billion used to leverage as much as £15billion of private investment. Likewise we could also see government balance sheet guarantees used to support investors in raising much needed finance.
While he warned that these new means of supporting development would take time to establish themselves, he also noted that finance was not the sole concern in getting projects underway. Regulatory certainty had to be established so that private investors could spend their money with a reasonable expectation about the returns they would generate.
On planning Dr Cable said that there would have to be changes. These were being developed, to help ease the process and avoid the delays that can often deter or raise the costs of development that is widely recognised as being needed.
The Business Secretary commented that this was an issue of people as well as business. With that in mind he said that government was trying to work with supply chains and through apprenticeship programmes to develop the skill base. He highlighted the need for tunnelling competence in the UK, which will require investment in training as the extent of tunnelling work in the UK grows thanks to projects like HS2, the Thames Tideway and Crossrail.
So it was clear that infrastructure had become a massive priority in the wake of a financial crisis that had changed the nature of the financial sector and made clear the case for the training and regulatory certainty to benefit the sector. While these efforts may take several years to pay dividends, they were crucial to government efforts.
Asked about training, he said that the culture of building up a career, sometimes through the city and guilds, had declined over a long period. He suggested that to reverse this there would be a move towards very high level apprenticeships that will in future be supported at the level of a university degree.
Asked from the floor whether the government was aware of the value of the ODA in delivering the Olympics and what lessons that could teach, the Secretary of State said that much could be learned. The project itself had been well managed with one central organisation to focus on delivery across the board.
Put to him that there was a problem in finding apprentices because schools focus on academic success rather than skills, Dr Vince Cable said there was a big push to get children up to basic levels of English and maths without which they can’t achieve very much. However, he stressed that he knew cases of 50 people applying for each apprenticeship place. So while he accepted issues with skills in schools, there remains quite some demand for apprenticeship places.
Author: Editor Gavin Pearson (firstname.lastname@example.org or 0207 202 0255)