By Richard Threlfall, UK Head of Infrastructure, Building and Construction, KPMG

Infrastructure will again be top of the agenda in this year’s Autumn Statement as the Government continues to grapple with how to drive economic growth.

A way forward on the Private Finance Initiative (at last) and a refresh of the National Infrastructure Plan are both on the cards, and no doubt more announcements on schemes to be supported by UK Guarantees and perhaps next steps on the Strategic Roads Review.
Government heartache

But behind all the announcements will lie heartache at the centre of Government as to why the economic good news they crave is not coming through. Agendas are switching towards housing and a desperate search for “shovel-ready” projects, though they will have to search hard to find much that is ready to go.

The answer lies outside the ivory towers of Whitehall in the UK’s major cities. It would repay the Chancellor to set off now on a whistle-stop tour of Manchester, Leeds and London itself; he would quickly find enough ideas on how to create a growth-led government to fill the entire autumn statement.

The recipe is not hard. Set out a vision for the economic future, create a single, focussed authority (not a dozen Whitehall silos), overlay with simple clear objectives, focus public funds on investment and prioritise schemes according to impact on growth.

This is what is happening in Greater Manchester today. KPMG has helped create the governance frameworks and the economic models that focus on growth. West Yorkshire, West Midlands, South Yorkshire, Bristol, Glasgow and many other city regions are catching up fast. Boris has his London Plan and unitary Government. Whitehall is being left behind.

The Government will update the National Infrastructure Plan, but it lacks real vision in many sectors, and without real reform in the culture of Whitehall it will remain hope rather than reality. We need an economic rather than a financial Treasury at the heart of Whitehall, that believes in investment to drive growth, and a structure that binds all Government Departments to this agenda.

We need a public sector balance sheet that shows whether we are investing enough to stop our infrastructure deteriorating, and recognises spend on infrastructure as investment in the future. We need a holistic approach to the economic development of this country covering housing, schools, hospitals, leisure facilities and all the supporting energy, utility, transport and digital infrastructure, not an artificial mantra that says economic infrastructure good, social infrastructure bad. Change the culture at the heart of Government towards a focus on the UK’s future economic competitiveness, and economic growth will be quick to follow.

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