Government seeks investor views on infrastructure
Image: Skyshark Media/Shutterstock
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
The government is seeking views from investors and other stakeholders about its 10-year infrastructure strategy, while confirming the introduction of a planning and infrastructure bill in the spring. The infrastructure strategy will be published together with the Spending Review in June.
The government will introduce a new bill to speed up housing and infrastructure delivery, it confirmed on Sunday.
“Too often the answer to new development has been 'no'. But that is the attitude that has stunted economic growth and left working people worse off... These are our next steps, and I can say for certain, there is more to come,” said chancellor Rachel Reeves.
Reeves is due to give a speech on economic growth on Wednesday, which could include an announcement on releasing defined benefit surpluses, according to Sky News.
The Treasury has now published a working paper on a 10-year infrastructure strategy “to support a flourishing modern economy, drive growth, deliver net zero and support improved public services”.
Among others, the strategy will set out the government’s views on private investment and regulation to provide clarity to investors and the supply chain.
As part of its ongoing consultation on the development of the strategy, the government is now seeking industry views.
The working paper lists three ways to create a forward-looking infrastructure pipeline, noting that they are not mutually exclusive. They are: an investment programme; a forward pipeline of funded projects; and a static list of priority projects that are built as funding becomes available.
The government will introduce a new bill to speed up housing and infrastructure delivery, it confirmed on Sunday.
“Too often the answer to new development has been 'no'. But that is the attitude that has stunted economic growth and left working people worse off... These are our next steps, and I can say for certain, there is more to come,” said chancellor Rachel Reeves.
Reeves is due to give a speech on economic growth on Wednesday, which could include an announcement on releasing defined benefit surpluses, according to Sky News.
The Treasury has now published a working paper on a 10-year infrastructure strategy “to support a flourishing modern economy, drive growth, deliver net zero and support improved public services”.
Among others, the strategy will set out the government’s views on private investment and regulation to provide clarity to investors and the supply chain.
As part of its ongoing consultation on the development of the strategy, the government is now seeking industry views.
The working paper lists three ways to create a forward-looking infrastructure pipeline, noting that they are not mutually exclusive. They are: an investment programme; a forward pipeline of funded projects; and a static list of priority projects that are built as funding becomes available.
The questions put to stakeholders - including “major investors” - are, among others:
- Of the types of pipeline – which are the most important features to industry?
- How best can the government provide greater certainty for industry? Including the role of the strategy, a pipeline, and departments?
Views can be emailed to 10YearInfrastructureStrategy@hmtreasury.gov.uk.
The government promises to take 150 decisions on major infrastructure projects by the end of this parliament. So far, nine have been taken.
Giles Payne, a client director at Capital Cranfield Trustees, said it was good news that a longer term plan with a predictable flow of projects is envisaged.
The government promises to take 150 decisions on major infrastructure projects by the end of this parliament. So far, nine have been taken.
Giles Payne, a client director at Capital Cranfield Trustees, said it was good news that a longer term plan with a predictable flow of projects is envisaged.
"I think that it is important to understand that where pension schemes are going to provide capital [and] invest, so that the characteristics of the investments match the return characteristics that pension schemes require," he said.
Payne explained that defined contribution schemes can provide long-term capital but will have trouble in accommodating any J-curve in investment returns as this short-term fund value reduction may not be tolerated by members, adding that DC schemes could be better suited to debt or mature projects.
Payne explained that defined contribution schemes can provide long-term capital but will have trouble in accommodating any J-curve in investment returns as this short-term fund value reduction may not be tolerated by members, adding that DC schemes could be better suited to debt or mature projects.
DB schemes, on the other hand, can provide long-term capital, but he said this might only be suitable for larger ongoing schemes that are open or in run-on. Those aiming for a pension risk transfer in the short or medium term are unlikely to lock up capital in this way.
"As insurers will be holding very significant long-term holding against long-term liabilities, it would be a good idea to consider if the funding regulations could accommodate these types of investments," Payne said.
What do investors need to see from an infrastructure strategy and pipeline?
