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Infrastructure policies and investment

Published Tuesday, June 27, 2017

This note examines the current state of infrastructure in the UK, recent Government policies and levels and sources of investment.

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This note examines the current state of infrastructure in the UK, recent Government policies and levels and sources of investment. The Government’s infrastructure policies do not focus only on economic infrastructure, but also cover social infrastructure and housing.

The UK was ranked 9th the in the world in terms of the overall quality of its infrastructure in 2015, behind Germany (8th), France (7th), but ahead of the USA (11th), according to the World Economic Forum.

However, the OECD and various economic commentators believe that the UK has under-invested in its infrastructure since the 1980s. Levels of investment in the UK have generally been lower than G7 and OECD averages in recent decades.

The Government argues that a higher level of investment is needed in the UK. This note outlines some of the measures that the Government has taken to increase and deliver infrastructure investment, including:

  • the National Infrastructure Commission
  • the National Productivity Investment Fund
  • Pension fund reforms
  • PF2
  • UK Guarantees Scheme

Analysis of the Infrastructure and Construction Pipeline reveals that of the total planned investment between 2016/17 and 2020/21, 50% is privately funded, 43% is publicly funded and the remaining 7% comes from a mixture of public and private funds.

The largest share of the planned investment goes into transport (31%), followed by energy (26%) and utilities (20%). Housing and regeneration account for only 4% of the total.

This chart shows Public Sector Net Investment (PSNI) as a percentage of GDP since the mid-1950s:

PSNI

Commons Briefing papers SN06594

Author: Federico Mor

Topic: Economic policy

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