As part of the comprehensive assessment into infrastructure investment in the UK, the Institution of Civil Engineers (ICE) has revealed that 47% of survey respondents would be in favour of ditching vehicle tax and fuel duty for new ‘pay-as-you-go’ charges on UK roads.
The institute believes it’s vital to take into consideration the changing landscape and the expected introduction of electric vehicles onto UK roads with the new technology requiring a change in the way taxes are charged and collected.
The State of the Nation 2018: Infrastructure Investment report published today by ICE surveyed the public on the matter before making a recommendation to government on new revenue streams for the road network. The survey results showed that just 23% opposed the proposed new payment method and 30% who were either undecided or did not have an opinion either way.
Alongside ‘pay-as-you-go’ charges for the road network, report also recommends that ministers should consider contingencies, such as a UK Investment Bank, against the loss of low-cost finance should the UK lose access to the European Investment Bank after our withdrawal from the EU.
Commenting on the report, Paul Sheffield, ICE vice president and chair of the State of the Nation Steering Group said: “It’s important that we recognise the changing societal landscape and adapt accordingly – moving towards an electric vehicle fleet will require a change in the way taxes are charged and collected, just as a change in emerging technologies will require variation in how energy is stored. This report makes recommendations to government as we work together to create a sustainable future for infrastructure.”
The need for debate about future infrastructure spending is particularly timely as we look at the UK’s future spending trends. The OECD recommendation is that by 2030, global infrastructure spending should be 3.5% of world annual GDP. However, the fiscal envelope for public investment in UK infrastructure between 2020 and 2050 sits at 1.0%-1.2%, with any further investment to come from the private sector.
Professor Lord Robert Mair, ICE president, added: “We face a time when the demands on infrastructure services are changing and increasing, with pressures from population growth, ageing demographics, increasing urbanisation, and resilience issues due to climate change. To respond to these in the long-term, and remain globally competitive, we must have an open and robust debate about how to fund our future infrastructure needs – and encouraging private investment must be considered.”
The report’s findings and recommendations were based on discussions, conversations and workshops with over 150 organisations and professionals. As well as civil engineers, the panel consulted with experts from the wider infrastructure sector, and the investment community.
Today's report underlines the growing industry backing for reforming the way our roads are currently funded. In January, the Association for Consultancy and Engineering (ACE) published its Funding Roads for the Future report which called for "dynamic road-user pricing" which takes into account a driver’s journey, the time of day, congestion on the network, and even their financial situation.
Policy recommendations sent to government:
- The feasibility of establishing a UK Investment Bank should be explored as a contingency against a loss of access to low cost anchor finance from the European Investment Bank and to maintain domestic expertise in infrastructure investment.
- Active steps should be taken to facilitate the use of alternative funding and financing mechanisms, including asset recycling, land value capture and crowdfunding.
- The National Infrastructure Commission should be placed on a statutory footing in the long-term to ensure its permanence and enhance its ability to give independent expert advice.
- The National Infrastructure and Construction Pipeline should support the investor community through providing increased detail of the risk and viability of individual projects