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Conservative Party Conference: Financing Britain’s Infrastructure
2 October, 2017 @ 5:45 pm - 7:00 pm BST
Join us as a panel of policy and industry experts debate how best to finance Britain’s infrastructure to ensure that local economies have the transportation systems and new housing they need. The event will take place at the Conservative Party Conference on Monday 2 October 2017 from 17:45 – 19:00.
The government is increasingly coming to the conclusion that the key to solving the housing crisis is to invest in infrastructure, thereby connecting available land to jobs. However, the challenge remains as to how this infrastructure should be financed given the precarious state of the public finances. The CIL review has recently concluded that the current approach to financing infrastructure has not worked out as expected.
The £2.3bn housing infrastructure fund announced in the Autumn Statement, although welcome, is insufficient to bridge Britain’s infrastructure deficit. Britain’s infrastructure stock as a % of GDP is only 57% versus 71% in Germany. Furthermore, Britain is expected to invest only 2% of GDP in infrastructure versus a 3.5% OECD recommendation.
One reason why the rate of infrastructure investment in the UK is so low is that it tends to be paid for out of general public expenditure. When it comes to prioritising infrastructure against health, education and defence it is not surprising that it has been consistently at the bottom of the list.
But financing local infrastructure from general government taxation is the exception rather than the rule internationally. Many of Britain’s competitors across the world use land value capture where bond holders are paid back by the revenue streams derived from the uplift in land values. Hence, it is welcome indeed that the government has stated its determination to explore this solution, with numerous references to land value capture in the housing white paper.
The Centre for Progressive Capitalism estimates that a small change to the 1961 Land Compensation Act could lead to a jump of 25% in infrastructure investment, or an extra £185bn over 20 years for England alone.
Key questions to be debated include:
- To what extent is Britain’s ambition to boost housing being held back due to insufficient infrastructure investment?
- How might Britain exploit land value capture to finance infrastructure unlocking available land for housing?
- How would local economies be able to undertake these large scale projects?
Martin Tett, leader, Buckinghamshire County Council
Kate Henderson, chief executive, Town and Country Planning Association
John Penrose MP, member of parliament for Weston-super-Mare
Chair: Thomas Aubrey, director, Centre for Progressive Capitalism
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The image is ‘East India Quay’ by Davide D’Amico, published under CC BY 2.0