By Marcus Leach
As George Osborne prepares to deliver his Autumn Statement the government have announced a multi-billion pound investment programme aimed at getting Britain's economy moving.
The government have highlighted infrastructure investment as the key to returning the economy to consistent growth - with two thirds of the £30 billion set aside said to be coming from the National Association of Pension Funds and the Pension Protection Fund.
"We're putting in place a new arrangement with private pension funds - which is the first time this has been done in this country - to try and unlock pension fund money to go into infrastructure," Chief Secretary to the Treasury Danny Alexander said.
However, there is concern that the spending under the guise of economic growth is just that, as Jonathan Russell, partner ReesRussell, explains.
“It is always worrying when Government talk about spending on infrastructure to stimulate growth," he said.
“The problem with infrastructure is that if there is real commercial need for it, then it should be done anyway and if not why are we doing it?
“If we are just bringing forward future expenditure it makes sense to do it when there is capacity in the system as it should cost less to do though Government does not have a good track record in making good deals!
“The big question is what infrastructure — it is infrastructure that will generate future business activity or is it just infrastructure just for the sake of doing it now? The problem with the latter is the legacy of the debt afterwards with no commensurate benefit or income stream.”
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