Create infrastructure bank to drive economic growth says Localis
A new report calls for the establishment of a National Infrastructure Bank (NIB) to spur economic growth in infrastructure projects.
The joint report from local government think-tank Localis and the Lloyds Banking Group, suggests using some of the money saved from quantitative easing to part fund the 30 billion NIB.
Localis chief executive Alex Thomson said, ?We need to get Britain’s economy growing again. We believe that a bottom-up approach is the best way of catalysing such growth.?
Called ‘Credit Where Credit’s Due’, the report recommends investing in a number of projects to mitigate risk for investors. It also supports extension of credit to both public and private sector stakeholders for building new local infrastructure projects.
The report further suggests that investments in infrastructure projects – a major part of the government’s plan to kickstart the economy over the next five years – should be direct, and that banks should be persuaded to join in the venture and offer loan disbursements.
The NIB can be leveraged for a period of four years without growing the deficit, the report suggests. It says that nearly 8 billion can be found from the new round of Quantitative Easing of 50 billion, about 12 billion or 8.5% from funds held in the 101 local government pension schemes and about 10 billion or 0.5% from the UK private pension funds.
According to estimates, less than 1% of the 2 billion held in the UK pension funds are currently channeled for local infrastructure needs, and the report suggests that a NIB could set the tone for additional investments from both the public and private sectors.
Among other recommendations, the report says Local Enterprise Partnerships (LEPs) should be vested with a number of new powers including the provision of a non-mandatory receipt pooling function for business rate and Community Infrastructure Levy monies. Each LEP should comprise an Enterprise Zone with an option of bidding for new zones that are expected to come up by April 2014.
The report concludes by calling for greater collaboration among councils at the sub-LEP level including pooling of funds between councils for expediting infrastructure development and job creation.