Jon Hart, infrastructure partner at law firm Pinsent Masons, said that most of the announcements relating to infrastructure were not new while the housebuilding measures were just camouflage that ‘missed the point’.
Mr Hart said: "Housebuilding – the extension of 'Help to Buy' and new homes in Ebbsfleet provide a camouflage of good news stories for construction, whilst missing the point that the industry is not a monolithic industry. The infrastructure sector of the industry remains shot-to-pieces and no real palliative measures have been announced from the despatch box today.”
He continued: "There is a paradox in this. As part of the improving economic fortunes, there is perhaps more potential financing available for investment in infrastructure than at any time since the high water mark before the economic slump. New sources of investment – whether through the Pensions Investment Platform, institutional funders or through sovereign investment funds – including the so-called ‘wall of Chinese money’ – are looking for opportunities to invest in appropriate assets. The over-heated secondary market for infrastructure demonstrates the strength of the appetite for new projects. But where are they?
"Part of the problem is funding, not finance. In the money-go-round of the constraints within which the Chancellor has had to operate, there has been no appetite to look at sources of new funding i.e. from individual voters to pay for new projects. However, the clock is running down. This isn’t just in respect of the months remaining to the next election, but in the length of time before overseas investors will shrug their shoulders and look to put their money elsewhere. An opportunity remains for the government to get on the same page as institutional investors and funders before the general election, but there isn’t much from today’s announcement to suggest that this is going to be particularly high on the political agenda.”
Calling for more assets to be disposed of, he said: “The government must allow overseas investors to invest in building Britain and creating a new and modern infrastructure so desperately needed. Britain is a safe haven economy, offering a home for investment. Top of the list are a range of real estate assets and projects funded by foreign investors, but also energy assets and increasingly foreign investors are eyeing up key transport and other infrastructure development.”
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