Chancellor launches £23bn infrastructure fund
A £23bn National Productivity Investment Fund has been launched by Chancellor Philip Hammond to support spending on infrastructure and innovation to boost economic growth.
Although he steered clear of major projects, Mr Hammond focused on supporting smaller, local initiatives that can be implemented more quickly.
Mr Hammond said: “We choose in this Autumn Statement to prioritise additional high-value investment, specifically in infrastructure and innovation, that will directly contribute to raising Britain’s productivity.”
£1.1bn is to be invested in local transport networks in England where the Chancellor hopes “small investments can offer big wins”. £220m will be used to address traffic pinch points on strategic roads, £450m to trial digital signalling on railways to “squeeze more capacity out of our existing rail infrastructure”, and £390m on low-emission and driverless vehicles.
In a rare mention for the Northern Powerhouse, Mr Hammond said the Department for Transport will “continue to work with Transport for the North to develop detailed options for Northern Powerhouse Rail”.
Infrastructure investment will also target the housing sector through a £2.3bn Housing Infrastructure Fund, unlocking land enabling up to 100,000 new homes in areas of high demand.
The Chancellor also confirmed investment in research and development, as announced by Prime Minister Theresa May earlier this week, to boost productivity through innovation.
“We do not invest enough in research, development and innovation,” he said. “As the pace of technology advances and competition from the rest of the world increases, we must build on our strengths in science and tech innovation to ensure the next generation of discoveries is made, developed and produced in Britain.”
Linked to the innovation investments is a £1bn commitment to digital infrastructure to meet the Chancellor’s ambition “for the UK to be a world leader in 5G”. In assition, the Government will introduce 100% business rates relief for a five-year period from April on new fibre infrastructure, supporting further roll out of fibre to homes and businesses.
Mr Hammond has also pointed towards a future increase in infrastructure spending, from its current level of 0.8% of GDP up to between 1-1.2% from 2020, and has asked the National Infrastructure Commission to make recommendations based on that level of investment.
