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Experts call for devolved infrastructure powers and funding for local authorities


Senior researchers at some of the country’s leading universities are calling for more devolved powers and funding for local authorities to solve the UK’s infrastructure challenges.

Researchers from the iBUILD Infrastructure Research Centre, led by Newcastle University in collaboration with experts at the Universities of Birmingham and Leeds, are warning that a lack of local knowledge, engagement and ownership is leading to the wrong infrastructure being put in the wrong place at the wrong time.

Speaking in advance of the publication of the iBUILD mid-term review and manifesto, Are you being served? Alternative infrastructure business models to improve economic growth and well-being, iBUILD Centre Director Richard Dawson, Professor of Earth Systems Engineering at Newcastle University, said: “Infrastructure plays a crucial role in economic development. However, existing approaches to infrastructure are criticised for being too narrow and returning poor value. In particular, the current centralised and top-down approach to infrastructure development and management is preventing locally-led business models from flourishing and is discouraging innovation.

“We need business models that take a more local and longer-term view of infrastructure. Local authorities and community trusts have shown they are able to take a lead in developing alternative approaches to infrastructure funding and management. However, they are currently prevented from assuming greater responsibility due to restrictions on their ability to raise and retain local revenue.”

Professor Andy Pike, iBUILD Deputy Director, added: “National government needs to devolve greater fiscal powers on taxing and spending and responsibilities to local institutions so they can deliver infrastructure that better reflects the values and needs of the communities it serves. This should be complemented by a stronger, statutory devolved role for cities and localities within national infrastructure planning.”

iBUILD research has revealed that the ability of local authorities to capture the proceeds of growth and reinvest it in local infrastructure remains constrained. It shows that there are numerous economic and social benefits to a more flexible approach to fiscal decentralisation and broader devolution of infrastructure planning, regulation and delivery, including reducing fuel poverty, lowering carbon emissions, creating local jobs and reducing costs.

Professor Andy Pike said: “The new City Deal arrangements in England and Scotland have scratched the surface of devolution of infrastructure powers, but they see central Government maintain strict fiscal control over their operation and there have been highly uneven outcomes in allocations to city-regions. At one extreme, over a million people in the Black Country received around £3million in immediate cash commitments from Whitehall while the 1.75 million people living in Glasgow & The Clyde Valley will benefit from a total of £1billion of direct grant funding from the UK and Scottish governments.

“The City Deals are an important development, but when viewed in an international context they do not represent radical decentralisation. A more comprehensive and systemic approach is required to support local infrastructure delivery.”

The researchers also found that alternative investment approaches such as revolving funds, tax increment financing, municipal and social impact bonds, and crowd-sourced funding are currently underused in infrastructure delivery in the UK. In addition, local authorities have limited in-house knowledge and insufficient capacity to engage with complex infrastructure decision processes, which limits the willingness of local stakeholders to become involved in infrastructure planning and development.

The iBUILD Centre’s mid-term review and manifesto, Are you being served? Alternative infrastructure business models to improve economic growth and well-being, will be launched on 26 March at the Institute of Mechanical Engineers in London.

Following an overview of the report’s findings and recommendations, there will be a Q&A with:

published on: 27 March 2015