The Independent View: how Liberal Democrats can provide Clegg’s “gear shift” in infrastructure spending

As Nick Clegg has recently noted, there needs to be a ‘gear shift’ in infrastructure spending. Whilst George Osborne dots the i’s and crosses the t’s on his third budget, it is worth considering how such a ‘gear shift’ may be enacted. Localis has undertaken just such an analysis, and this week launched Credit Where Credit’s Due – produced in partnership with Lloyds Banking Group – that illustrates how local government can help deliver a step-change of this type from the bottom-up. Though our report alights on many policy areas, from increasing the powers of LEPs to astute asset management by local authorities, it is worth stressing three ideas of particular relevance to Liberal Democrat ears.

Firstly, we argue that local authorities should be given greater remit to help drive growth. Whilst the government wishes to keep a controlling hand on local authorities to ensure deficit reduction targets are met, we argue that by freeing authorities  – giving them greater control over their business rates, and greater ability to borrow against them (i.e. Tax Increment Financing) – to fund infrastructure there is not only the potential to create jobs in the short term, but provide the infrastructure Britain needs to keep up with global competition in the coming years.

Secondly, Credit Where Credit’s Due squarely identifies the need for a more responsible capitalism to ‘reorient’ – as Lib Dem peer Lord Shipley (Government Cities Adviser) comments of our report – ‘our economy for the better.’ This entails a better model of public-private partnership between local authorities and businesses on the one hand – with rigorously procured Local Asset Backed Vehicles as an alternative to PFI – but should also see UK private pension funds (which hold trillions of assets), investing a tiny fraction of their funds into domestic infrastructure. The financial crash – knocking some 30% of the value of the FTSE 100 –  forms a salutory lesson: stable investment opportunities that can also offer a social good, such as infrastructure, should not be the poor relation of casino style capitalism.

Lastly, on a related note, there is room – we argue – to extend the Green Investment Bank model into a wider, £30bn institution. By capitalising a new National Infrastructure Bank, and encouraging institutional funds (including private pension funds, as above) to invest in this entity, the government could help kickstart a new wave of infrastructure investment. Given the long-standing Liberal Democrat commitment to this concept, Lib Dems may wish to debate where wealth taxation (particularly a mansion tax) could help fund such an institution.

Authorities either Liberal Democrat controlled or where Lib Dems are in coalition are doing good work, pertinent in several ways to the funding of future infrastructure. Our report includes reference to interesting initiatives in Birmingham and Cambridge specifically, amongst many examples of innovative work across the country. To drive forward infrastructure investment, such creativity will need to continue. There will be, it appears, no single solution – but by using the range of options currently available, as well as pressing for more power in future years, local government can build upon its creative record to date, and help deliver the infrastructure the country needs.

The Independent View‘ is a slot on Lib Dem Voice which allows those from beyond the party to contribute to debates we believe are of interest to LDV’s readers. Please email [email protected] if you are interested in contributing.

* Richard Carr is a Policy Adviser at Stamp Out Poverty. For those who wish to read further, it is worth consulting the short FTT myth-buster Stamp Out Poverty have produced:

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This entry was posted in Op-eds and The Independent View.


  • There is a shortage of skilled British workers at all levels – craftsman, technician, scientist and engineer. Unless we introduce German style education and training to ensure we have the skilled British workforce , we are in danger of increasing immigration. What percentage of the Olympic workforce is British? In takes at least 5 years to recruit and train a skilled workforce. Working out of doors in Britain in winter can often be tough. I see no evidence that the LDs understand the character and skills required to be a highly competent construction worker who can work dilligently through the British winter.

    Deciding on infrastructure development without considering the manpower requirements is like planning a military campaign without considering the numbers and skills of soldiers, sailors, airmen and marines required.

    Engineering Technicians (EngTech), Information and Communications Technology Technicians (ICTTech), Incorporated Engineers (IEng) and Chartered Engineers (CEng).

    Before anyone gets carriedwith infrastructure projects I suggest they aquaint themselves with the EngineeringCouncil at and the various grades of technician and engineer:-
    Engineering Technicians (EngTech), Information and Communications Technology Technicians (ICTTech), Incorporated Engineers (IEng) and Chartered Engineers (CEng).

    Also look at the Construction Industry Training Board CITB

    We neeed to know the following
    1. What skills do we need ?
    2. What level of experience ?
    3. Where are the skills needed?
    4.What skills do we have ?
    5. What do we need to recruit?
    6. How long will recruitment and training take?
    7. How much will training cost?
    8. Who will pay?

    I would suggest that obtainin g at least Eng Tech Status will be more profitable for the individual than obtaining an arts degree from a Non-Russell Group University in the future.

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