When chancellor George Osborne announces his budget on 20 March, the world will be watching to see how the coalition frames the next phase of its economic strategy, designed to help the country out of recession.
There are many voices, from Lord Heseltine to business secretary Vince Cable, urging more facilitative infrastructure investment. I would join them.
We have our own three-point plan:
Firstly, and most importantly, we need to see a focus on delivering the ideas and projects that are being generated at a local level across the country. At present there is far too much reliance on the centralised processes involved in delivering growth. Projects that are effectively ready packaged and able to get started risk being held up by these processes to such a degree that the commercial opportunities may be missed.
The LGA and British Property Federation report on growth makes this point. We know it is a series of different things in different places that will help the housing market - how do we know this? Because that is what the house building industry is telling us.
Tax Increment Financing, for instance, was strangled before it was ever launched essentially for fears about displacement activity. However, where communities can prove there is genuine additionality, rather than displacement of economic activitiy, they should be allowed to have a greater share of the proceeds of growth so that they can fund the facilitative infrastructure needed. This is the second thing we need to see within the budget - support for schemes that have customised, independently assessed, and above all robust financial cases.
In my experience of working with Whitehall, it lacks commercial understanding. Most Whitehall officials have not had experience of dealing withd developers, bringing commercial activity to market and making these growth proposals happen. The Treasury - not just Department for Communities & Local Government - needs to be willing to understand the specifics of proposals of siginificant national scale. Housing minister Mark Prisk will go and look at sites, bu the Treasury are not accompanying him. It would help if they would come out from behind their desks and see schemes and commercial partners. We need to get the Treasury interested in it and working with the locality to tailor solutions.
In Kettering we have developed a project over the last two years that has brought significant private sector partners wnating to deliver housing, renewable energy and employment land. The scheme will bring forward 10,000 jobs, 5,500 homes and 60MW of clean, green, renewable energy. It is, in essence, a proof of concept that growth can equate to sustainability if done properly.
The scheme was subjected to a rigorous ‘green book’ financial assessment by Local Partnerships; the outcome of which idicates that for a capital injection of around £60m from government, there would be £1.2bn of economic activity generated. The funding wouldn’t even have to be provided upfront - simply guaranteed to be provided when certain highways infrastructure was require in four or five years time. After two years of touting round Whitehall, and lots of interest from a variety of ministers, our commercial partners need to see a commitment to facilitate infrastructure.
We need to get to a stage where government is comfortable talking to, listening to, and supporting local projects and ideas - be they in the city or the shires; be they in Manchester, Cornwall or Kettering. We’ve found that ministers tend to get this. They are generally willing to engage, and are interested in what the localities have to say. But as Lord Heseltine points out, processes can get in the way and at times the lack of cross departmental approach hampers traction.
Whatever the chancellor does we cannot have the situation where proven commercial investments worth £1.2bn to the economy cannot happen because of £60m of road infrastructure. Whatever else we do, we have to fix that.
David Cook, chief executive, Kettering BC