With Chancellor Rishi Sunak’s Budget set to be delivered on March 3rd, GIIA members recently met with Investment Minister, Lord Gerry Grimstone to discuss the vital role infrastructure investors can play in supporting the UK’s economic recovery from Covid-19 while also meeting the Government’s ambitious ‘levelling up’ and net zero agendas.
GIIA set out seven priorities for the Government to address drawn from a new policy document published today The Future of UK Infrastructure which sets out both the opportunities and challenges for the sector, noting that global investors have both the ambition and capital required to make the Government’s goals a reality.
Speaking at the meeting, GIIA CEO Lawrence Slade emphasised the important role that the newly-created Office for Investment has in helping to shape the right investment environment to ensure investors can have full confidence in the UK as an attractive destination to deploy long term capital.
“The UK’s policy and regulatory frameworks have successfully mobilised significant private investment over the last 4 decades but the jury is out in many international investment committees about the attractiveness of the UK compared to other markets,” said Slade.
“Building on the momentum from the release of the National Infrastructure Strategy it is time for Government and the private sector to work collaboratively to address some of these challenges and unlock the capital required for a greener, more resilient and digitally enabled economy.”
GIIA’s seven steps for the UK Government to take to deliver on their ambitious agenda are:
1 – Ensure that local and regional transport operations can continue to serve communities post Covid19, to support the Government’s Levelling Up agenda. A key element to that is ports and airports which also provide significant GVA to local economies.
2 – Provide clear and consistent strategic advice to regulators in core sectors such as energy, water and digital to ensure investment demands can be met fairly over the coming decades. This will in turn help drive investment, while protecting gold standard elements of the UK’s regulatory regime. Government should develop with industry a strategy to maintain infrastructure resilience and ensure regulatory settlements allow for adaptation investment.
3- Set out a clear net zero delivery plan to both deliver the vision from the Prime Minister’s 10-point plan and provide a visible long term project pipeline – this could include for example a clear plan for heat decarbonisation which could attract funding to this critical sector (see our recent report in partnership with PwC ‘Unlocking Capital for Net Zero Infrastructure‘ for more).
4 – Urgently provide development capital to scale up nascent markets such as hydrogen and CCUS, and provide clarity around potential funding options.
5 – Engage with investors over the role and remit of the National Infrastructure Bank, ensuring that funding opportunities are fully open to competitive processes from across the infrastructure funding sector.
6 – Ensure the National Security Bill legislation and subsequent operation delivers a streamlined and user-friendly experience for friendly international investors
7 – Investors, Government and Regulators must learn from international best practice, work together to improve project management reporting and build an evidence base on the benefits of PPPs, learning from where they have been successful around the World.