HM Treasury today published the Government’s National Infrastructure Plan which maps out how the Government aims to stimulate needed investment in UK infrastructure, which is estimated to reach £200bn over the next five years. The plan covers five priority areas: Energy, Transport, Digital, Flood Management Water and Waste, and Intellectual Capital. The plan is dominated by proposals for Transport and Energy, the latter of which is set to see a doubling of investment between 2010 and 2015.
In order to enable the development of infrastructure the Government intends to use public funding more carefully, with targeted interventions such as the Green Investment Bank to stimulate growth in low carbon industry. Furthermore, Local authorities will be authorised to utilise Tax Increment Financing to borrow against projected growth of business rates in order to fund localised infrastructure projects.
To ensure that private sector investment grows to meet projected demand the plan sets out how the Government will make regulatory and planning reforms across various Government departments in order to help mitigate risk and speed up the development cycle. For example, proposals to reduce the level of risk transfer and therefore the cost of capital in certain instances are introduced, while the plan also sets out an aim of introducing a progressive carbon price via reform of the Climate Change Levy in order to ensure that investors benefit from more predictable revenue streams.
It is clear that the Government recognises many of the problems investors face, for example regulatory and planning uncertainties, high costs of capital and uncertainties over the policy direction of the Government, several of which have been addressed today.
NECC welcomes the allocation of funds to help upgrade UK ports, and the decision to safeguard both the Feed in Tariff and the Renewable Heating Incentive; both represent valuable opportunity for North East businesses. We look forward to consulting with the Government as it takes the National Infrastructure Plan forward.