Date: 20th December 2017
The last Budget and the underpinning OBR forecast suggests the UK faces significant challenges. The central threat is stalling productivity growth which is expected to grow at almost half the rate experienced in the 30 years to 2007. The Industrial Strategy (IS) aims to address this challenge and rebalance the economy across regional lines.
The role of physical infrastructure in unlocking growth has been recognised by successive governments but its prominence in the IS is significant. The importance of a functioning transport system, sufficient capacity in our utility networks, the availability of affordable homes and the increasing demands for digital connectivity have long been understood. Insufficient investment in these and other infrastructure systems can act as a brake on the UK’s long-term growth prospects.
I have taken a look at what the government proposals amount to and how local areas should position themselves to ensure they can benefit from infrastructure investment.
The National Strategy
A Local Perspective
The additional funding targeted on infrastructure is welcome. Regeneris is already supporting various organisations, including local authorities and LEPs, to make the case for investment which maximises an area’s strategic and economic contribution to growth nationally. We also regularly develop and test new approaches to demonstrate the impact of investments, including wider social factors and drawing on the most recently published government guidance.
There are some clear lessons for organisations looking to fund and support local investment to unlock growth. Below I’ve set out what I believe are the main issues that should be addressed:
The Industrial Strategy is a positive commitment to infrastructure delivery across the UK. The challenge will be for local partnerships to develop their own local industrial strategies and investment propositions that clearly demonstrates a tangible contribution to national priorities and challenges.
SEMLEP Due-Diligence and Project Prioritisation Support: Regeneris is providing independent reviews of LGF and SCF funding applications to SEMLEP to ensure that the applications are sufficiently robust and that capital funding can be delivered in line with the LEP’s Assurance Framework. Projects assessed to date include highways improvements, R&D facilities, further education facilities and infrastructure that will unlock land for housing and employment. For over-subscribed programmes, we have also assisted SEMLEP in the prioritisation of investment programmes, by identifying the extent to which projects align to local and national priorities and identifying a programme that maximises the potential contribution to the LEP’s economic objectives.
D2N2 Value for Money Appraisals: D2N2 wanted expert advice on the value for money offered by investment projects being submitted to its Local Growth Fund. Regeneris has provided impartial advice on the range and scale of impacts proposed for a wide variety of scheme, including road improvements, cycle schemes, public realm enhancements and incubators for new business premises. We have advised the D2N2 board on 30 different investment projects. Our reviews have explored the expected benefits, costs, risks and value of each project. Our advice has helped the D2N2 LEP progress £137 million of its own investment in schemes which will unlock just over £500 million of investment in the local economy.
West London Transport Infrastructure: Regeneris quantified the economic costs of the inadequate orbital road and rail infrastructure in West London for the West London Alliance, and helped to identify the specific infrastructure interventions and investments that would yield the greatest return on the economy. A prioritised list of interventions was identified and this is being used to inform future investments in West London.
Lowestoft Third River Crossing Economic Impact: Suffolk County Council commissioned Regeneris to provide economic evidence to support their plans for a third harbour crossing in the town to ease congestion and open up new economic opportunities for growth. We assessed the impacts that a third crossing could have on regeneration, business growth and job creation. Our findings helped to inform the outline business case for the third harbour crossing and helped to unlock £70 million of capital investment from the Department of Transport (DfT).
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