Think tank calls for infrastructure bank part-funded by council pension schemes
Author: Local Government Lawyer |
A leading think tank has called for the creation of a 30bn National Infrastructure Bank part funded by local government pension schemes.
In a report prepared in partnership with Lloyds Banking Group, Credit where credit’s due, Localis said the bank could spark economic growth ?from the bottom-up?.
This would be achieved by: spreading risk for investors by investing in a wide range of projects; lending to private and public organisations to fund the construction of new infrastructure such as bridges, roads, broadband, and local power stations; investing directly in infrastructure projects; and guaranteeing other banks’ loans to fund infrastructure.
Localis insisted that the new bank could be capitalised over a four-year period without increasing the deficit. It said funding would come from:
8bn from the new 50bn round of Quantitative Easing;
12bn from funds held within the 101 local government pension schemes; and
10bn from UK private pensions funds
The report claimed that the NIB could unlock greater investment in domestic infrastructure from both public and private funds.
The think tank also recommended that local enterprise partnerships be given new powers. These would see LEPs offer a (non-mandatory) receipt pooling function for business rate and Community Infrastructure Levy monies, each contain an Enterprise Zone, and be allocated by government a further Enterprise Zone which it could ‘auction’ to the private sector.
Localis argued that such an auction could provide upfront monies for infrastructure projects and help stimulate job creation.
The think tank also called for greater collaboration between councils at the sub-LEP level, including cross-authority pooling of money between individual authorities for infrastructure projects of cross-boundary significance.
Business Improvement Districts should be encouraged to span authority boundaries by amending existing legislation, Localis added.
Alex Thomson, the think tank’s chief executive, 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, and we are confident that the recommendations in our report would enable both more, and better-targeted, investment in the local infrastructure we need.?
Localis said its proposals for a National Infrastructure Bank had received cross-party support.
A copy of the report can be downloaded here.