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New body to tackle London’s infrastructure issues

London First has launched an Infrastructure Commission chaired by Macquarie Capital Funds Europe head Martin Stanley. The Commission is soliciting views from stakeholders before approaching relevant authorities with policy recommendations.

London First, a business membership organisation whose stated aim is “to make London the best city in the world in which to do business”, has launched a new Infrastructure Commission to address issues relating to the city’s infrastructure.

London First: making
London more productive

The Commission, which is chaired by Martin Stanley, head of Macquarie Capital Funds Europe, is seeking the views of London businesses and stakeholders in the form of a “call for evidence”, which has a deadline of 12 February 2010. It will subsequently form policy recommendations for regulators, local and national government on how London’s infrastructure needs should be planned, funded and delivered.

In a statement announcing the establishment of the Commission, Stanley said: “We are not playing politics with infrastructure, since the timescales involved vastly exceed those of the political cycle. Indeed, we aim to report late in 2010, after the general election. Our aim is to inform the government as it shapes policies which will set the framework and incentives for infrastructure investment.”

In the same statement, various statistics pointed to the need for infrastructure to be given urgent attention, both in London and the rest of the UK. It referred to a Policy Exchange calculation that “despite less flexible labour markets” France enjoys higher productivity of $53.7 per hour worked compared to the UK’s $45.4 “largely because of its excellent infrastructure”. Citing the example of Australia, the statement notes that London is competing with cities and countries that have a “centralised and coherent” approach to infrastructure planning, delivery and funding.

The statement added that the Commission would make sure that Infrastructure UK was “informed of its work on London issues”. Infrastructure UK was launched by the UK government towards the end of last year to look at all aspects of infrastructure in the UK with a particular focus on private sector investment.

According to recent estimates by the Institute for Fiscal Studies, the UK requires infrastructure investment of around £500 billion, or £50 billion per annum over the next decade. At the same time, public sector net debt is forecast to increase from 43 percent of gross domestic product in 2008/09 to 79 percent in 2013/14. London First concludes that “encouraging innovative funding mechanisms between the public and private sectors will be central to meeting London’s future needs”.