Authorities ‘must innovate’ if they are to deliver vital infrastructure

29 October 2009

Councils have been told that cuts in public spending will force them to innovate to deliver vital infrastructure projects.

A report from the New Local Government Network has highlighted the ‘tsunami of a public sector recession’ caused by the credit crunch, and says that the ‘shockwaves’ will be felt in transport, school buildings, housing, regeneration and other public facilities.

The think-tank says if Britain is to avoid the ‘crumbling infrastructure’ of the past, then local authorities should consider going directly to capital markets through bond issuance, explore alternative revenue-raising powers such as the workplace parking levy, and rapidly start exploring the potential to apply their own financial reserves more intelligently.

NLGN director, Chris Leslie, urged all political parties to think hard before making large-scale cuts in capital grants and loans.

‘Anxiety over the level of public sector debt is set to define the next decade of public service provision in the UK, but such a mindset risks a scenario in which economic growth is fettered by inadequate investment in the nation’s infrastructure,’ he said.

‘Local authorities are the principal agents in much of the nation’s infrastructure development and must be ready to rediscover the skills and techniques which can enable self-determined capital investment.’
Mr Leslie added that the constitutional circumstances which had ‘created a local government community almost totally reliant on Whitehall now risk leaving much of our public services and facilities bereft of investment.

‘Councils have the powers, albeit dormant, to relate to capital markets directly, should they choose to do so, and also possess great assets and reserves of their own which hold enormous potential for domestic reinvestment. We see it as vital that making more these powers and assets forms the vanguard of future, locally-driven investment,’ he said.

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