Economy: Infrastructure Asset Base

House of Lords written question – answered on 7th June 2007.

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Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs, Spokesperson in the Lords (Cap Reform), Environment, Food & Rural Affairs

asked Her Majesty's Government:

What is their response to the comments of the president of the Confederation of British Industry that the United Kingdom infrastructure asset base is contracting through inadequate capital formation.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

Public sector net investment (PSNI) includes all public spending on capital after accounting for the depreciation of the asset base. In real terms, PSNI is now at its highest point since 1976-77, increasing from 0.4 per cent of GDP in 2000 to an expected level of 2¼ per cent of GDP in the forthcoming spending review.

Much of this increased investment has been focused on those areas with large amounts of infrastructure in order to address backlogs from previous underinvestment. Between 2001-02 and 2007-08 central government capital expenditure on:

transport has more than trebled, from £1.5 billion to £5 billion;education has more than doubled, from £1 billion to £2.2 billion;science and technology has more than doubled, from £280 million to £610 million; andenvironmental protection has more than trebled, from £360 million to £1.1 billion.

In addition to increasing public sector investment, the recent planning White Paper outlines new procedures to eliminate barriers or disincentives for private sector investment in infrastructure.

First, Ministers will issue national policy statements about the infrastructure that the country needs for the next 10 to 25 years. Secondly, we are replacing the sometimes overlapping "consent regimes" for major infrastructure projects with a single system. This will provide a clearer and more accessible application process than at present. Thirdly, we propose to create a new, independent infrastructure planning commission to oversee the planning inquiry process on specific major developments and take the final decisions on whether they should go ahead.

These new procedures, set out in the White Paper, and the increase of investment over the past decade will help the public and private sectors to ensure that infrastructure is adequately maintained and expanded over future years to meet the country's social and economic needs.

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