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14/09/2015

Infrastructure investment will boost UK economy, says report

Words: Laura Edgar

Greater devolution, public services reform and locally led investment in infrastructure could solve the UK’s shortfall in productivity, according to a report.

UK Infrastructure: Unlocking UK Cities and Commercial Property, by Bilfinger GVA, calls for major changes to the way infrastructure - from rail and road to broadband - is funded and delivered.

The report was launched at the Connected Cities summit alongside a Core Cities UK prospectus: Unlocking the Power of Place.

Currently, UK Infrastructure states, London and the South-East remains the focal point of transport spending in the UK, but more investment needs to be directed at improving connectivity within the regions and the core cities.

It shows that the UK’s core cities account for 25 per cent of the economy, but output per capita remains below the national and European average in each city bar one.

“More than double” is spent on the capital than any other English region, with London receiving 40 per cent of UK local public transport spending and 37 per cent on railway expenditure in 2012/2013.

Rather than redistributing resources, UK Infrastructure “seeks to establish how the overall quantum of investment can be increased through innovative approached”, said Bilfinger GVA.

To achieve this, the Core Cities prospectus suggests that the UK needs to improve infrastructure delivery to the rest of the UK in a way that “supports London’s critical role, but allows other places to achieve more of their potential”.

UK Infrastructure warns, though, that any reduction in spending on the capital could damage London’s ability to cope with increasing demand, as its population is predicted to increase by almost 20 per cent over the next 15 years.

“Instead, increasing spending per head across each region needs to be the priority, using new financial mechanisms,” says the report.

Those mechanisms include tax increment financing, s.106 or Community Infrastructure Levy payments as well as the devolution of transport funding. This should help to attract private investment and “give regional infrastructure spending the boost it needs,” according to UK Infrastructure.

Sir Richard Leese, Core Cities chair and leader of Manchester City Council, said: “As long as the UK state remains one of the most highly centralised democracies in the world, our cities will remain stuck in second gear, unable to realise their full potential. If the core cities close the gap on output and match the UK average, an additional £66 billion can be added to the UK economy.”

If the government is to achieve its ambition of rebalancing the economy, transport infrastructure between the core cities and in the Northern Hub, need to be improved immediately, with UK Infrastructure suggests that trans-Pennine improvements should take place in a similar time frame as HS2, UK Infrastructure concludes.

UK Infrastructure: Unlocking UK Cities and Commercial Property can be found here.

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