Ministers are hampering progress towards their own objective of increasing private investment in UK infrastructure at a good price.
This report argues that if the Government wants to increase the volume of private investment in infrastructure it needs to publish a clear plan for future projects that addresses investors’ concerns about who will ultimately pay for them.
The report argues that persistent uncertainty will reduce the number of investors willing to bid, which will lead to inferior contract terms and ultimately higher costs for taxpayers and consumers.
It also finds Whitehall needs more civil servants with the commercial skills to negotiate and manage private finance deals effectively. Recent improvements have led to better private finance deals like the Thames Tideway Tunnel, but current civil service capability is not sufficient to meet the Government’s objective of substantially increasing private investment in infrastructure.
The Government must increase the number of project finance specialists able to manage the specific contractual issues that come with private finance.