Keep infrastructure central to recovery plans ACE tells Chancellor

Investment in infrastructure needs to be a continuing part of economic plans as the economy comes out of recession, the Association for Consultancy and Engineering (ACE) has said in its submission to the Treasury ahead of this year’s Budget on 19 March.

The Association for Consultancy and Engineering has called for continued progress towards creating a stable plan and long term vision for infrastructure investment. “Great strides have been made in recent years, however with the return to growth we must be on our guard to ensure infrastructure does not fall back down the political agenda,” the submission said.

One key recommendation is that the National Infrastructure Plan (NIP) should further expand its detail on specific project funding, better integrate the plans of devolved administrations, Local Enterprise Partnerships (LEPs) and local authorities and provide further detail on accessing the schemes available. The NIP update published in December 2013 was a great improvement on previous editions, with revised timescales and additional clarity and substance that will provide confidence to industry and investors, ACE said.

"With the return to growth we must be on our guard to ensure infrastructure does not fall back down the political agenda” 

Further developments should be undertaken to improve the detail of project data, ACE maintains. For example, the current NIP shows a breakdown by sector of the funding types, which will provide investors with certainty as to how their up-front investment will be repaid. Such data for specific projects would be even more useful, to the same groups, significantly improving investors’ confidence in how projects are to be funded, providing the impetus for the unlocking of up front finance.

 “Encouraging more private sector investment in infrastructure is, after all, a stated government aim. The OECD estimates that the funded pensions market is worth $24.6tr worldwide. These investors require certainty and longevity in terms of their returns, however, the construction phase is considered too risky, with these funds mainly investing following asset completion. Improvements in the NIP and a firm commitment from government to create a more stable long term regulatory environment will go a long way to convincing pension funds that getting involved at an earlier stage will reap the rewards they expect,” said the submission.

ACE also made further calls for greater budgetary certainty for departments and agencies by putting them on 10-year funding cycles; for a renewed commitment from government to the cause of prompt payment to drive better market behaviour; changes to incentives around the delivery of housing to increase supply; and a more prominent role for the Green Investment Bank in providing investment.

To read ACE’s Budget submission please click here.

Peter Campbell is policy officer at ACE -