Richard Threlfall, KPMG’s Head of Infrastructure, Building and Construction comments on the Government infrastructure spending plans published today:
“It’s great to see that infrastructure remains on the top of the Government’s agenda. The new plan sends another strong signal that the UK Government believes in the short and long-term value of investment in the UK’s infrastructure, to create jobs and ensure the country’s future competitiveness.
“The UK has invested less in its infrastructure over the last 30 years than most of its competitors and the Government’s challenge is how quickly it can catch-up, especially given affordability pressures on consumers and the Government. Ultimately we need to pay for our investments, but private finance can help defer the cost to when the economy is stronger. That is why the ‘centrepiece’ of today’s announcement is the commitment by a group of major insurers to invest £25bn into infrastructure.
“However, we need to put this figure into perspective. It is less than 10% of the total investment needed, and it remains to be seen how quickly, and to what level, it is invested in actual projects, and whether it is invested in new projects, or just displaces existing investors in operational assets and utility companies. The ‘real news’ is that the Government has helped negotiate a more supportive regulatory framework under Solvency II, enabling life insurers with long term liabilities to provide long-term finance. Improvements to the accuracy of the infrastructure pipeline also help create the conditions where the private sector can plan for the longer term, and should help support the uplift in private investment in infrastructure as a result of the improving economic outlook.”
Notes to Editors
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