THE TREASURY is to team up with pension funds in an attempt to kick-start the economy with a £30bn investment in Britain’s infrastructure.
George Osborne said the government is targeting £20bn of investment from insurers, pension funds and infrastructure fund managers, and two groups have already signed a memo of understanding.
The chancellor said a pipeline of more than 500 projects worth £6.3bn across the country will be supported over the next ten years, of which £5bn-worth are new, to help counteract “many years of under investment”.
The project focuses on rail, roads, waste, water and technology.
Treasury minister Danny Alexander, who will monitor the projects, said £5bn will be reallocated to the infrastructure works over the life of the parliament.
“Access to finance from pension funds heralds a new acceptability of infrastructure as an acceptable asset class… I think more broadly, the nation now ‘gets’ what infrastructure is all about and the importance it plays in underpinning economic growth,” said Andrew Stevenson, head of infrastructure at construction consultancy Davis Langdon.
The National Association of Pension Funds said the plan “could be a real win-win”.
Around £1.4bn will be spent on railway infrastructure, in conjunction with Network Rail. This will include a rail link between Oxford and Bedford, supporting up to 12,000 jobs, working with Network Rail to electrify the Transpennine Express, and bringing forward Highways Agency roadworks.
The Treasury also said it would write down £150m of debt on the Humber bridge, which will halve the toll price.
And outside the extra spending, the government backed a plan for a new Thames crossing at Silvertown.
“Our part of London is really badly served for river crossings, and delays caused by the Blackwall Tunnel are a big problem, so new schemes are well worth examining,” said Nigel Fletcher, deputy leader of Greenwich Conservatives. “No specific plan has been put forward, but if it is in the right place, a new crossing could do a lot to ease traffic congestion across Greenwich Borough.”