UK government pledges to 'kickstart infrastructure revolution'

Out-Law News | 06 Sep 2019 | 9:04 am | 1 min. read

The UK government has promised to "kickstart the infrastructure revolution" in the coming months as part of its spending plans for the coming year.

Rebuilding the UK's national infrastructure will be the "first priority" of the government's economic plan, said chancellor of the exchequer Sajid Javed, as he published departmental funding plans for 2020-21. The government intends to announce "ambitious" capital investment plans later this autumn, alongside publication of its planned National Infrastructure Strategy.

"Across many decades, governments of all colours have underinvested in infrastructure," said Javed, in a speech to parliament. "It isn't good enough."

Referencing the Oakervee review of HS2, Javed said that new projects would "have to show real value for money, with credible delivery plans and budgets". The government would also "do more to give private investors the confidence to back these projects", he said.

Hart Jonathan

Jonathan Hart

Partner

The long term skills shortage, supply chain management and the potentially damaging impact of post-Brexit tariffs should be high on the agenda. To be blunt, the need for considered investment has never been greater.

Immediate announcements include additional spending on policing, health and education; an additional £432 million to help DEFRA set "world leading environmental standards" after Brexit and £200 million to "transform" bus services. The government has also allocated an additional £2 billion to Brexit delivery, including transport infrastructure at ports and more support for business readiness.

However, the announcements come against a backdrop of reduced activity in the UK construction sector, with purchasing managers reporting the sharpest drop in new orders since March in the latest Purchasing Managers' Index (PMI) data. The government was due to publish its National Infrastructure Strategy by July 2019, one year after the publication by the independent National Infrastructure Commission (NIC) of its National Infrastructure Assessment in July 2018.

Infrastructure law expert Jon Hart of Pinsent Masons, the law firm behind Out-Law, said: "The chancellor has highlighted the importance of investment in UK infrastructure and the need for an 'infrastructure revolution', but this is set against a backdrop of dismal construction output stats forecasting of fall of up to £10.5bn by the end of 2020 in the event of a no-deal Brexit".

"The bottom line is that serious issues need to be addressed. The long term skills shortage, supply chain management and the potentially damaging impact of post-Brexit tariffs should be high on the agenda. To be blunt, the need for considered investment has never been greater. The challenges are great in seeking to address the infrastructure deficit that has continued to grow over the last few years: housing, healthcare, transport, schools, prisons – even the fabric of parliament itself," he said.

"Given the length of tenure that the new chancellor has had in office so far, it would be wrong to expect too much – especially if the government is entering into electioneering mode. Even so, it is important to understand what consideration is being given to investing in the nation's infrastructure and what substance there might be behind any mitigation policies to help support the construction sector," he said.