Infrastructure

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Some notes about Infrastructure

Infrastructure is the “in” word for public policy across the world. Its re-emergence comes as a result of three separate but related topics: the economic crisis and the need to stimulate demand; the poor state of much infrastructure; and the link between infrastructure, productivity and economic growth. All of this has become wrapped up in the slogan “Build Back Better”.

In Britain, there has been a continuing flow of initiatives, policies and announcements. The National Infrastructure Plan, and the planning law reforms, were supposed to give an overall cohesion and set sectoral priorities at the national level. As with most such plans, it has come to be dominated by a small number of very large projects, each with a strong political edge. These are HS2, Crossrail 1 & 2, a new runway in South East England, Hinkley nuclear power station and the Thames Tideway. There is now also the PM’s Ten Point Plan and the link to “levelling up”.

The enthusiasm has not been matched with delivery, and there has been little harmonisation of the contracts and the financial approaches. Each project has had its own structure. Much of the design has been driven by the political imperative of keeping as much as possible off the government’s balance sheet, and to attract foreign investment. Much less thought has been given to the combined financial burden on future customers, and their ability to pay. Savings now are not equal to investment. No longer is the public sector pay-as-you-go, translating current savings into current investment. Instead, we have pay-when-delivered and usually well beyond the life of the current governments.

The challenge is to develop smart ways to use the government’s much lower borrowing costs, and to assign risk between the state and the market on the basis of the ability to manage and control it. The next steps involve the creation and development of proper national balance sheets, with assets and liabilities clearly set out.

Latest Publication

June 22, 2016

Infrastructure Presentation

Presentation for Infrastructure Investment Conference

Publications

Publication Infrastructure How long can interest rates remain low?
November 22, 2013

We live in extraordinary times. Real interests are negative, have been negative for several years and the forward guidance from central bankers suggests that they believe they are going to stay that way for several years to come. Yet this is a very unnatu

Publication Infrastructure British Infrastructure and the Gradual Return of the state
November 14, 2013

The state of British infrastructure is the source of almost continuous study and criticism. There is now a host of new demands in water, energy, transport and communications which require a step change in investment. The Coalition government has made a se

Publication Infrastructure Why is infrastructure in Britain so difficult to deliver?
September 10, 2013

The consequence of the ’project wish list’ approach rather than an integrated plan is not just that many things don’t get done, but that the costs tend to be much higher

Presentation Infrastructure Redefining the models for private sector investment in infrastructure - The RAB Model
February 9, 2011

Slides for the UK Infrastructure Summit: New Era, New Priorities, New Challenges

Presentation Infrastructure Applying the RAB approach to infrastructure
July 13, 2010

City and Financial ConferenceCreating an Efficient Funding Market for Infrastructure InvestmentJuly 13th 2010, London

Presentation Infrastructure The infrastructure challenge - provision, funding and delivery
March 17, 2010

Projects International conference in Brussels

Publication Infrastructure The evolution of Infrastructure and Utility ownership and its implications
December 9, 2009

Oxford Review of Economic Policy, Volume 25, Number 3, 2009, pp.411–434 Abstract The paper documents the significant changes of ownership since the infrastructure utilities were privatized and, in particular, the shifts from the initial focus on dispersed

Publication Infrastructure Infrastructure investment, the cost of capital, and regulation: an assessment", Oxford Review of Economic Policy
December 2, 2009

Infrastructure investment article from Dieter Helm

Publication Infrastructure The challenge of Infrastructure Investment in Britain
September 1, 2009

Chapter in "Delivering a 21st Century Infrastructure for Britain" co-authored with Ben Caldecott and James Wardlaw. Published by Policy Exchange. The British economy at the end of the first decade of the 21st century is not in good shape. The credit crunc

Publication Infrastructure Britain must save and rebuild to prosper
June 4, 2009

Financial Times piece. How did the UK get into such an economic mess? There are many causes, but central to any explanation is that consumption has been unsustainably high at least since 2000, and this excess has been based upon ever-higher levels of priv

Some notes about Infrastructure

Latest Publication

Investing in Future Utility Infrastructure

Publications