UK 2013 Budget reactions

Industry pundits comment on the government’s increased infrastructure spending announcement.

Iain Coucher, managing director, Alvarez & Marsal (and former chief executive of Network Rail)

“An extra £3 billion will only help to tinker around the edges of UK infrastructure – removing bottlenecks and easing congestion. Any real long term investment plan requires tens of billions of pound per year, over many years, to make a real step-change. The country doesn’t need tweaks to the existing networks, in many parts of the country we now need new roads and railways that will provide faster journey times and additional capacity.” 

Deborah Zurkow, chief investment officer, infrastructure debt, Allianz Global Investors 

“By earmarking a further £3 billion from a fiscally constrained budget, the Chancellor has underlined the importance of infrastructure spending to the UK economy. Given the estimated £200 billion pipeline of infrastructure projects identified by the government, the lion’s share of investment will need to come from the private sector.” 

“The government should be congratulated on the steps it has taken thus far but more focus is needed on unlocking additional sources of investment. In particular there is a gap – perhaps bridgeable through education – between the type of projects the government is seeking investment for (new builds) and the types of investments pension funds are looking to make (refinancing).”  

“By deepening investor understanding of this specialised sector, together we can improve the chances that new projects get off the ground while investors tap into an asset class with attractive risk-adjusted returns in a low-yield environment.”  

Nick Prior, head of infrastructure, Deloitte 

“The Chancellor has found an extra £3 billion per annum from departmental budgets to invest in infrastructure from 2015/16. While that is welcome, the challenge remains for the Government to translate this pledge into reality.”   

“Today’s commitment needs to be backed up by action and delivery. The fact remains that the construction sector has contracted in each month since October last year and new orders are down by nearly 40 percent from their peak in 2007. This is despite many announcements and initiatives that have not been able to arrest this decline.” 

“If infrastructure is to be the silver bullet for economic recovery, we need to see shovels hitting the ground on projects that have a real impact in driving growth sooner rather than later.”  

Richard Bowker, senior advisor, EC Harris  

“Whilst £3 billion extra for infrastructure capital spend might at first appear welcome, it does not kick in until 2015, the details of the schemes are yet to be explained and it still only represents a fraction of what is identified in the National Infrastructure Plan pipeline.”  

“It is to be welcomed that someone with the track record of Lord Deighton is to look hard at the mechanisms for delivery of infrastructure projects.  We look forward to concrete proposals in June as to how delivery will be transformed.”