One of Britain’s largest infrastructure investors called Britain “a Banana Economy” with the ethos “Build absolutely nothing anywhere (or anyone)”. But he said that there was a large amount of capital to change this.
Dominic Veney, Finance Director of Pension Insurance Corporation (the insurer), said: “We do not see a shortage of domestic capital for viable projects. “There are not enough viable projects for investors to invest in.”
The new capital will be used to replace the legacy pension schemes that are being taken over by insurers like PIC over the next ten years. He said that infrastructure and housing project which produce reliable income for decades in the future are a perfect match to the liabilities.
Havant Thicket, in Hampshire, is the first new reservoir to be built in the UK in over 30 years.
Why are there so few projects that get off the ground? We believe that this is partly due to the UK being a Banana Economy,” he stated in a PIC publication, which will be released this week.
Veney said that developers and investors “underplayed” the social benefits of potential Infrastructure Projects. These include non-financial and hard-to quantify benefits, such as improved health outcomes, social cohesion and stimulus for local businesses.
Veney said that better communication was required to highlight these social benefits, and convince local planners. Veney cited the mess in the departments that many local councils had created, which was leading to “a vicious cycle” in which investors shunned councils located in needy areas because they were unable to fund their priority of social services and children’s care.
PIC has launched a campaign to collect cash from investors and developers that will be given to the government in the form of a fund that is ring-fenced to pay for additional planning officers who can help to reduce the long delays for getting approval for projects.
Dominic Veney, of PIC, says that Britain needs more planners who can give green lights to housing projects.
Labour has pledged to galvanize the work on regeneration in the regions, if they win the elections on July 4. Tracy Blackwell is the chief executive of PIC and she sits on the British Infrastructure Council. The council advises Rachel Reeves the shadow chancellor.
PIC is one of the biggest players in the pension fund buyout market, with deals signed with Next and De Beers.
The company has assets of about £47 billion and has invested in infrastructure projects and regeneration, including Havant Thicket Britain’s first new reservoir for over three decades and the Thames Tideway sewerage system. It invested £200m in One Eastside in Birmingham, which will be the tallest residential building in the city.
The company said that build-to rent flat blocks should be viewed as “vertical village”, and more emphasis should be placed on social cohesion. In a second build-to rent project in Manchester called New Vic it is trying to encourage that by hosting “meet your neighbours” and dog walking clubs.
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