UK seeking £50 billion infrastructure boost

worldtraveller

British ministers are drawing up plans for a £50 billion housing and road-building programme harnessing private sector money, a newspaper reported on Sunday.

The Sunday Times said Osborne wants private sector money held by pension fund managers and insurance companies to fund the infrastructure programme to boost the recovery.

His plan is designed to prompt a surge of housebuilding and public sector construction projects, including power stations, social housing, super-fast broadband and toll roads, it said.

These would be on top of 40 infrastructure projects already in the pipeline, including rail, road and national electricity grid improvements, which the government plans to speed up.

Reuters

StevieJ

Oh no I am starting to think like Boy George :eek:

A good example would be toll roads run by the private sector, no cost to govt but an improvement to the infrastructure of the country with the addition of extra jobs.

https://forums.moneysavingexpert.com/discussion/3571625

CLAPTON

well we will see

I'm sure George will draw up a list of already planned infrastructure projects and claim them as new and as a result of his initiative

New toll roads? with our planning laws they will start (if ever) sometime in the 2020s

globalds

Correct me if I am wrong but as these private investors will be wanting a fair return ....Does that not put a greater debt burden on the system.

StevieJ

globalds wrote: »

Correct me if I am wrong but as these private investors will be wanting a fair return ....Does that not put a greater debt burden on the system.

Not if they charge the public e.g. toll roads, social housing.

pqrdef

worldtraveller wrote: »

The Sunday Times said Osborne wants private sector money held by pension fund managers and insurance companies to fund the infrastructure programme to boost the recovery.

There's a very simple way to achieve this. The Treasury issues things called bonds and sells them to the pension funds and insurance companies, which currently will take them even at sub-inflation rates of interest. Then it spends the money on the projects.

StevieJ

pqrdef wrote: »

There's a very simple way to achieve this. The Treasury issues things called bonds and sells them to the pension funds and insurance companies, which currently will take them even at sub-inflation rates of interest. Then it spends the money on the projects.

The worry comes when that ceases to be free choice.

epz_2

globalds wrote: »

Correct me if I am wrong but as these private investors will be wanting a fair return ....Does that not put a greater debt burden on the system.

The theory will be you can wait 30 years and have the cost double/triple/quadruple+ for an infrastructure project be delivered or you can put pension money to work, they would get a stable return and manage the projects properly.

The infrastructure will generate growth and jobs building it + future efficiencies/jobs/growth depending upon the project.

In theory public infrastructure it the cheapest since it makes zero profit but the reality is they never seem well managed, as long as the payment profile is well set up the profit the private company makes is less than the overrun costs if the projects are run by the government.

There is unfortunately the main problem is the government seems just as crap at negotiating projects so the private sector has little incentive to keep costs to the public down.

Sapphire

Still relying on over-population, then, to 'boost' the economy – but at what cost to society and the environment?

All hail the property 'market"...

globalds

epz wrote: »

The theory will be you can wait 30 years and have the cost double/triple/quadruple+ for an infrastructure project be delivered or you can put pension money to work, they would get a stable return and manage the projects properly.

The infrastructure will generate growth and jobs building it + future efficiencies/jobs/growth depending upon the project.

In theory public infrastructure it the cheapest since it makes zero profit but the reality is they never seem well managed, as long as the payment profile is well set up the profit the private company makes is less than the overrun costs if the projects are run by the government.

There is unfortunately the main problem is the government seems just as crap at negotiating projects so the private sector has little incentive to keep costs to the public down.

So If this were my problem and not the UK's

it would go something like this.

I have a rather large debt and my business isn't very healthy.

I go to the bank with the idea that I get my hands on some cash to maybe by a few tools and as I'm a farmer build a second barn and put some gravel on my decrepit roads.

Now I say I don't want this debt to be mine so I will leave the calculations on whether it is a good idea to another company that will look at it's expected return on lending me the money.

Sounds OK.. ....But surely there views on a successful investment aren't the same as my view on how effective it will be at getting my business back on an even keel?