Despite recognition by the government of the value of infrastructure investment in stimulating the post-Brexit economy, there was very little new money promised. As a consequence, the most up to date analysis of the national infrastructure pipeline shows that 35% of total infrastructure spending and 54% of all transport infrastructure spending in the UK will continue to take place in London. 2017 is a critical year for the Northern Powerhouse. With significant transport spending rounds being prepared and a strategic transport plan due to be published by Transport for the North, public and businesses alike will expect to see major new commitments. Energy, flood defence and broadband will also require significant investment to meet local needs, to ensure economic competitiveness and to meet climate change obligations.
In order to facilitate the investment required to transform the northern economy, government and subnational stakeholders need to adopt a principles-based approach to infrastructure investment that recognizes the importance of both finance and funding; public and private investment working together; greater subsidiarity and local autonomy; and a more sophisticated approach to appraisal.
“Paying for our Progress: How will the Northern Powerhouse be Financed and Funded?” – a new report by IPPR and Squire Patton Boggs – recommends that the government should:
- Use its March budget to pledge new investment in Northern Powerhouse infrastructure
- Redraft the Treasury Green Book to better reflect the wider economic benefits of infrastructure projects
- Provide for greater borrowing by local authorities and Transport for the North and for a Northern Powerhouse Infrastructure Bond
- Package up investment opportunities into a northern infrastructure prospectus