Infrastructure 4

The future for UK infrastructure investment

Currently the UK is investing a huge amount of money into improving the nation’s infrastructure, however to lift and maintain GDP for the UK, it is estimated that further investment of £20 billion each year is needed by 2021-22. But why is this necessary, and how could this be put into practice in the future?

Success in Germany

In Germany, there is a National Investment Bank that is publicly-owned, which helps to rebuild much of the country’s infrastructure following WW2. Many experts believe this is a great example of how investment should be managed, and has proven successful and progressive. It is thought that The Institute for Public Policy Research (IPPR) will make the recommendation to follow this example later on this year, and establish a similar way of managing national infrastructure investment.

Raising GDP in the UK

GDP currently stands at 2.6 in the UK, but in order to raise it before 2022, an annual increase of £20 billion is estimated to be required. This would make it the highest percentage of investment since before the UK’s financial crisis, at 3% of total GDP – however this is still only equal with the OECD average for public investment.

Inflation has affected investment in the UK’s infrastructure

Earlier on this year, the Bank of England raised interest rates to 0.5%, indicating that there is very limited non-inflationary slack left in the British economy. This means that prices risk becoming out of control if a higher borrowing cost is not implemented.

However, many industry experts, such as Michael Jacobs, co-author of the IPPR report, disagree. He has argued that increased investment into the UK economy could fill this capacity and that this is a great opportunity for public investment to make a change and create economic growth over time.

Current infrastructure investments

One of the largest current commitments to investing into building UK infrastructure is the National Infrastructure and Construction Pipeline, which was released towards the end of last year. It proposed over £500 billion of investment including large-scale projects such as the Thames Tideway Tunnel and the implementation of Smart Meters on a National Level, just to name a couple of major projects.

What does the future hold?

It is likely that the large investment into the UK’s infrastructure at this present time will be continued, with the possibility of increasing. Although the future is uncertain, there are undoubtedly benefits that come with investing into transport links, housing and other improvement schemes that can benefit both local communities and the country as a whole.

Whatever the future holds, The RG Group are ready to take on any construction projects to build towards a stronger UK economy. We have experience across many sectors, specialising in retail, living space and commercial developments, and have worked across different areas of the UK.

Give The RG Group a call today on 01732 526 850 to discuss your construction project requirements.

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