Copper’s Annabel John looks at what the Budget might mean for infrastructure.
Protecting jobs, delivering public services efficiently and a budget which paves the way for a brighter future for our country; these were all part of Chancellor Phillip Hammond’s attempt to paint a vision for Britain’s future and boost productivity. The reality is, as the Chancellor himself recognised, there were few surprises in the Budget.
While the government continued its commitment to investment in infrastructure, with money made available for roads, rail, digital infrastructure, to help power the UK into the future, the Chancellor also announced that he will end the era of PFI (private finance initiative), with the “days of the public sector being a pushover” coming to an end.
Indeed, PFI has been in the spotlight since Carillion’s collapse at the start of the year. This is something that the Labour party has clamoured for – and the Conservatives are now going to deliver amid a lack of evidence that private financing provides value for taxpayers, according to HM Treasury.
While existing PFI deals will remain in place, the Chancellor left the door open for public-private partnerships, but what that might look like is unclear. And it certainly raises question marks about some major projects. How will infrastructure providers have the space to pay for investment without PFI? If investment in a particular area isn’t announced as part of a major spending round, will there be flexibility to deliver it without a mechanism like PFI?
The decision will certainly leave a gap in the government’s capital spending plans and it will have to develop a new model for public and private sector partnership, not least to provide the industry with renewed confidence in the government’s commitment to critical infrastructure investment.
The Budget promised much, but a host of relatively small announcements mean that the genuine impact for the UK’s economy and productivity will certainly remain to be seen. For infrastructure in particular, the government is still yet to respond to the National Infrastructure Commission’s (NIC) needs assessment and, while the Budget was positive in so far as it promised new investment in roads and some pieces of strategic infrastructure, it did not address an overarching plan and didn’t refer back to the report from the NIC. As a result, there were many sectors that were simply over looked.