By Jaimie Kaffash
17 September 2009
Growing public dissatisfaction with roads and highways can be resolved only by setting up a government-run bank for infrastructure projects, the Institution of Civil Engineers has said.
The trade body’s latest quarterly survey of the public’s attitude towards public services, published today, showed a drop in satisfaction with public services for the third consecutive quarter. According to the study, only 54% of respondents were happy with the state of roads and highways in the UK – a drop from 58% in the last survey and 58% in the quarter before. It added that 39% of those surveyed said highways and roads should be first or second priority for government investment – only waste disposal scored higher.
Tom Foulkes, director general of the ICE, said: ‘With an estimated £1bn road maintenance backlog, there are too many roads that have been in need of proper repair for a long time and are deteriorating further by the day.
‘Funding for maintenance tends to focus on quick-fix reactive work which rarely tackles the underlying cause of damage and fails to prolong the life of the road,’ he said. ‘The government’s focus should be on planned, preventative maintenance programmes.’
At a time of major public spending cuts, he called for ‘a secure and predictable source of funding for planned road maintenance projects and other infrastructure projects’, recommending that this could be achieved through ‘a national infrastructure investment bank’.
The bank would be initially funded by the government and would use the UK’s triple-A credit rating to raise funds on the international market . The infrastructure built with the funding would create valuable national assets that would further underpin the bank’s creditworthiness. It would emulate the Nordic Investment Bank, which aims to ‘provide long-term, complementary financing, based on sound banking principles, to projects that strengthen competitiveness and enhance the environment’.
But Mark Hellowell, a Private Finance Initiative expert at the University of Edinburgh, warned that the case hadn’t been made for a NIIB. He told Public Finance that there was growing support from the government , which mentioned a similar scheme in the Budget this year, and from Right-leaning think-tanks. But, although the bank would attract investment, he said it would not make much sense for the government.
There ‘wasn’t a coherent rationale’ behind this weight of opinion, he said. ‘From a contractor’s, or builder’s or civil engineer’s point of view, it probably would generate a steady stream – projects but from a public interest point of view, I think the case hasn’t really been made,’ he added.
There was no economic benefit over borrowing, he said. Any money spent would be off-balance sheet, and such mechanisms were ‘not well regarded’ he added. There were ‘no genuine macroeconomic or fiscal benefits for doing it’, he said.
Responding to the charges of public dissatisfaction, the Department for Transport said that it was investing money in the highways. A spokesman said: ‘The maintenance of the national road network is a key priority for the government and that is why the Highways Agency is investing over £1bn in repairs and improvements over the next year.
‘We have also trebled funding for local authorities to invest in maintaining their roads and last year announced new funding to help local authorities better assess the condition of these roads. This is in addition to funding provided for routine maintenance.’
17 September 2009
Growing public dissatisfaction with roads and highways can be resolved only by setting up a government-run bank for infrastructure projects, the Institution of Civil Engineers has said.
The trade body’s latest quarterly survey of the public’s attitude towards public services, published today, showed a drop in satisfaction with public services for the third consecutive quarter. According to the study, only 54% of respondents were happy with the state of roads and highways in the UK – a drop from 58% in the last survey and 58% in the quarter before. It added that 39% of those surveyed said highways and roads should be first or second priority for government investment – only waste disposal scored higher.
Tom Foulkes, director general of the ICE, said: ‘With an estimated £1bn road maintenance backlog, there are too many roads that have been in need of proper repair for a long time and are deteriorating further by the day.
‘Funding for maintenance tends to focus on quick-fix reactive work which rarely tackles the underlying cause of damage and fails to prolong the life of the road,’ he said. ‘The government’s focus should be on planned, preventative maintenance programmes.’
At a time of major public spending cuts, he called for ‘a secure and predictable source of funding for planned road maintenance projects and other infrastructure projects’, recommending that this could be achieved through ‘a national infrastructure investment bank’.
The bank would be initially funded by the government and would use the UK’s triple-A credit rating to raise funds on the international market . The infrastructure built with the funding would create valuable national assets that would further underpin the bank’s creditworthiness. It would emulate the Nordic Investment Bank, which aims to ‘provide long-term, complementary financing, based on sound banking principles, to projects that strengthen competitiveness and enhance the environment’.
But Mark Hellowell, a Private Finance Initiative expert at the University of Edinburgh, warned that the case hadn’t been made for a NIIB. He told Public Finance that there was growing support from the government , which mentioned a similar scheme in the Budget this year, and from Right-leaning think-tanks. But, although the bank would attract investment, he said it would not make much sense for the government.
There ‘wasn’t a coherent rationale’ behind this weight of opinion, he said. ‘From a contractor’s, or builder’s or civil engineer’s point of view, it probably would generate a steady stream – projects but from a public interest point of view, I think the case hasn’t really been made,’ he added.
There was no economic benefit over borrowing, he said. Any money spent would be off-balance sheet, and such mechanisms were ‘not well regarded’ he added. There were ‘no genuine macroeconomic or fiscal benefits for doing it’, he said.
Responding to the charges of public dissatisfaction, the Department for Transport said that it was investing money in the highways. A spokesman said: ‘The maintenance of the national road network is a key priority for the government and that is why the Highways Agency is investing over £1bn in repairs and improvements over the next year.
‘We have also trebled funding for local authorities to invest in maintaining their roads and last year announced new funding to help local authorities better assess the condition of these roads. This is in addition to funding provided for routine maintenance.’
