Chancellor’s Four-point plan to build Britain’s infrastructure

Chancellor George Osborne has announced a four-point plan that is envisaged will change the way major infrastructure projects are planned, determined and funded.

The first of the measures in the four-point plan is Mr Osborne’s call for an ‘urban planning revolution’ on brownfield sites in an effort to free up land to help build one million homes targeted by 2020. This will see the obstacle of unnecessary planning laws on brownfield sites removed.

The housing budget is also to be directed at new ‘low cost homes for sale’ for first time buyers, and the extension of the right to buy to housing association tenants.

The second point in the plan will see the existing 89 Local Authority pension funds pooled into six British Wealth Funds, each with assets of over £25Bn. It is hoped that this measure will save millions of pounds in costs and fees per year and will be used to develop the expertise to invest in infrastructure.

The way pension savings are invested will also change. The funds will follow international norms for investment, meaning larger sums being invested in infrastructure.

At the moment, of £180Bn of assets, only 0.5% is invested in infrastructure projects. In other countries, however, those with larger pooled public pension funds, up to 8% of assets are infrastructure and 17% are housing and infrastructure.

The third point will see the government bring forward the sale of assets such as land and buildings no longer required to raise up to £5Bn over the course the next five years to fund new infrastructure projects.

The fourth point is a National Infrastructure Commission set up to act as an independent advisory body, offering unbiased analysis of the UK’s long-term infrastructure needs. The commission is to be headed by former Labour cabinet minister Lord Adonis, who relinquishes the Labour whip to advise the government on improving Britain’s infrastructure.

Speaking at the Conservative Party Conference in Manchester, the Chancellor said: “The Commission will calmly and dispassionately assess the future infrastructure needs of the country and it will hold any government’s feet to the fire if it fails to deliver.

“I am delighted that the former Cabinet Minister and Transport Secretary Andrew Adonis has agreed to be the Commission’s first Chair and help us create Britain’s plan for the future.”

Lord Adonis commented:  “I look forward to establishing the National Infrastructure Commission as an independent body able to advise government and Parliament on priorities. Major infrastructure projects like Crossrail and major new power stations span governments and parliaments.

“I hope it will be possible to forge a wide measure of agreement, across society and politics, on key infrastructure requirements for the next 20 to 30 years and the assessments which have underpinned them.”

The NIC will begin work immediately with an initial focus on planning to transform the connectivity of the Northern cities, including high speed rail (HS3), future large-scale investment in London’s public transport infrastructure, and how to ensure investment in energy infrastructure can meet future demand in the most efficient way.

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