Tackling the accusation that the UK’s coalition government is failing to deliver the pipeline of infrastructure projects that the country needs, Danny Alexander MP, Chief Secretary to the Treasury, said:
“We’re a lot better at delivery than we give ourselves credit for. You only have to think of Crossrail or the [2012 London] Olympics. I was in India last week and I saw UK companies out there making infrastructure happen. It’s something UK PLC is good at.”
Alexander was part of an exclusive discussion hosted by Infrastructure Investor in early November at the Houses of Parliament. The gathering brought himself and Labour MP John Healey face to face with infrastructure investors and advisers with the aim of identifying and meeting the challenges of UK infrastructure.
He said that the “stop-go nature of public spending has been a problem” in the past and that the National Infrastructure Plan (NIP) – a road-map of projects that the UK needs to deliver, which was published in October 2010 and envisaged £310 billion of total funding – “set out to address that”.
However, some investors who have applauded the NIP for its vision and scale of ambition are sceptical about whether it will make much difference in reality. Julia Prescot, partner and chief strategy officer at fund manager Meridiam Infrastructure, asked:
“We’re greenfield investors and, from an investor perspective looking at the NIP, what can we invest in? There are only about four or five out of 40 projects [in the plan] that we could put money into. As a predominantly greenfield investor, I’m more interested in what the potential is for investable projects rather than supporting the Highways Agency or a Network Rail bond.”
Alexander responded: “It’s not about finding enough greenfield projects for particular fund managers, it’s about what infrastructure the country needs. In offshore wind, for example, there’s a big need.”
Some have called for the delivery of infrastructure to be taken out of the hands of politicians and given to an independent body. This was a key recommendation arising from the Labour-commissioned Armitt Review, which argued for the establishment of an independent National Infrastructure Commission to take decisions to identify long-term infrastructure needs and monitor implementation.
However, Alexander argued for political control: “I have a slightly higher opinion of politicians. I believe we can have debates and reach rational conclusions. I’m not sure about sub-contracting to committees and moving the political issues that need addressing now to a later stage. These projects need to be scrutinised through public debate in Parliament.”
A broad range of other issues were discussed including the cost of infrastructure, High-Speed Two, the UK Guarantees Scheme and the role of pension funds. A full summary of the conversation may be found in the December/January issue of Infrastructure Investor magazine and also here.