Out-Law News 3 min. read

Coalition mid-term review a "missed opportunity" to clarify roadbuilding plans, say experts


The Government's 'Mid-Term Review' of its progress towards meeting its 2010 Coalition Agreement goals was a "missed opportunity" to announce new policies aimed at encouraging private investment in infrastructure, experts have said.

Jon Hart and Graham Robinson of Pinsent Masons, the law firm behind Out-Law.com, were responding to press reports that the Prime Minister and Deputy Prime Minister could use the review to report back on a 'feasibility study' on new ownership and financing models for the national roads system, which was announced in March last year.

The 49-page document (49-page / 533KB PDF) sets out a range of infrastructure investment commitments including rail improvements, "moving as rapidly as possible" towards the creation of a national high speed rail network and an "accelerated" road building programme. However, Jon Hart said that the document merely repeated earlier announcements and was "short on detail". The Government is yet to indicate when it will publish the results of the feasibility study.

"It is right to highlight the importance of investing in transport infrastructure but the headlines would appear to be a repetition of earlier announcements," he said. "The UK's standing in international infrastructure indices is woeful and a lack of investment in roads, rail, energy and other transport infrastructure in the UK has meant that we have fallen behind in the race to do business with emerging economies."

"The £5bn investment announced in last month's Autumn Statement is welcome but not enough. If the Government is genuinely committed to responding to the shift in global economic power, then a quantum leap is needed in its approach to implementing policies that attract investors from around the world."

In a joint foreword, David Cameron and Nick Clegg said that the Coalition Government was "steadfast and united" on dealing with the deficit and rebuilding the economy. They pledge help with childcare costs and the costs of long-term care for the elderly, as well as to "build more houses" and "set out plans for long-term investment in Britain's transport infrastructure". Announcements about each new policy initiative would "follow in due course", they said.

"Investment in infrastructure has consistently been one of the Government's key planks for the future prosperity of the UK economy," infrastructure law expert Graham Robinson said. "While exports to emerging markets in Asia, Latin America and the Middle East have grown, growth is constrained by poor quality infrastructure in Britain. The coalition talks about responding to the shift in economic power, but businesses in Britain need good quality infrastructure to connect with the rest of the world and to compete favourably."

"The mid-term review was an opportunity for the Government to announce the types of new policy measures aimed at bringing private investment into Britain's infrastructure from around the world. Sovereign wealth funds and institutions from around the world are investing in Britain's infrastructure, but the Government must open up opportunities for further private investment in infrastructure," he said.

He said that the Government would need to make "politically unpopular choices" if it was to be successful in attracting private investors to the UK road network. While there had been repeated announcements on "what" was needed, the Government was yet to make a specific announcement of "how" this would happen, he added.

In a speech on infrastructure at the Institution of Civil Engineering in March last year, David Cameron said that the Government needed to be "more ambitious" in looking at "innovative approaches" to increase road funding. He said that the feasibility study, to be carried out jointly by the Treasury and Department for Transport, would report back in the autumn. However, he said that the plans would not involve "mass tolling" on existing capacity.

In October, lobbyists the Confederation of British Industry (CBI) suggested that the Government move the trunk road network to a regulated asset base (RAB) model, similar to that created on privatisation of the utilities. Under the CBI's proposals road users would see a proportion of their motoring taxes converted to a user charge, controlled by a central regulator, to access the network. Additional revenue streams, such as tolling, could be introduced above the standard charge to enable private operators to finance improvements and bigger capacity projects, it said.

Robinson said that, if structured properly, the RAB approach could "open up opportunity for private investment to pour into Britain and support the development of new infrastructure".

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.