Infrastructure, infrastructure, infrastructure
Photo Credit: Guardian
Today, the Chancellor is at the National Railway Museum in York to launch the National Infrastructure Commission. Osborne will outline the commission’s plan to spend £100billon on infrastructure, focusing on three core areas – connections between cities in the North, London’s transport system, and energy. It will produce a report and recommendations on spending priorities at the beginning of each Parliament. Commissioners include former Labour Transport Secretary, Lord Adonis; Former Deputy Prime Minister, Lord Heseltine; Former chair of the Olympic Delivery Authority and ally of Lord Adonis, Sir John Armitt. Industry are likely to welcome the collaborative and experienced make-up of the Commission as they all have a track record of getting things done.
And they will need it, because “getting Britain building” has proved incredibly tricky. This is epitomised by the failure over the past 5-6 years to get housing construction numbers anywhere near pre-credit crunch levels. Housing is a key infrastructure need and although the political rhetoric and will has been high, registration of new homes is actually falling. The inability to get infrastructure built is partly economic and partly political. In the case of housing, regulation and access to finance have proved the biggest barriers. For larger projects, an economic policy of reducing the deficit and an adversity to borrowing means more reliance on Foreign Direct Investment. Securing this investment is more complicated and therefore protracted, and can be politically contentious if the money comes from certain countries. In some cases, like Heathrow and Gatwick, the Government just needs to make a tough a decision. Over the past five years the Government has often shied away from making tough decisions, deferring a decision or launching a review instead. Many would argue we have reached a tipping point and it is now for words to be translated into buildings, roads and rail. No pressure then, National Infrastructure Commission.