£100bn for infra, with transport at the top

The UK government announced £100 billion (€120 billion; $150 billion) of infrastructure investment yesterday, putting transport front and centre of the new spend. 

Danny Alexander, the Treasury’s Chief Secretary, touted the government’s long-term view on infrastructure, highlighting the £100 billion pipeline he unveiled this week is through to 2020. 

Among the standouts is the largest railway programme since the Victorian age, with £9 billion allocated to projects like Crossrail – a new high frequency, high capacity network for London and the South East – and plans to electrify some 850 miles of track across the country. 

High Speed 2 (HS2), the country’s second high-speed rail network, was allocated over £16 billion through to 2020-21 to help kickstart its development. The project has just seen its construction costs increase by roughly a third to £42 billion. In addition, the government has earmarked £7.5 billion to cover HS2’s rolling stock. 

Roads were also handed a big envelope with £28 billion committed to improving the country’s network, including £10 billion for maintenance. 

Renewable energy got a significant nod from the authorities, with Alexander announcing a ‘strike price’ for renewables that he argued would help generate an extra 8 to 16 gigawatts of offshore wind. Importantly, the UK’s Green Investment Bank got an £800 million boost to its budget, taking it up to £3.8 billion, with the ability to borrow £500 million in 2015-16. 

Treasury also made sure to remind the private sector that its guarantees programme was alive and well, with 25 projects worth £13.5 billion already pre-qualified for it. Among those is the £2 billion Mersey Gateway bridge, which recently announced a preferred bidder and which can receive up to £500 million in guarantees to help start its construction. 

Perhaps unsurprisingly, Chris Leslie, Labour’s shadow financial secretary to the Treasury, was not impressed: 

“This government is totally failing to deliver on infrastructure. Just seven out of 576 projects in the government’s last plan have been completed and 80 percent haven’t even started construction. No infrastructure investment has been brought forward this year or next year, as the IMF [International Monetary Fund] has demanded. And for all the hype, the government is actually cutting investment in real terms by 1.7 percent in 2015.” 

*To find out what the industry thought of the government’s infrastructure announcement, please click here.