Local Councils left in the dark by UK Infrastructure Bank
By World Infrastructure Journal-
The UKIB was created to support the delivery of major infrastructure projects and had initially promised £4 billion to local authorities. Four months after its creation, however, that money doesn’t appear to be available.
Launched in June of this year, the UK Infrastructure Bank is meant to “support regional growth across the UK and tackle climate change by accelerating investment in ambitious infrastructure projects in sectors including clean energy, transport, digital, water and waste. ” Offering a total of £22 billion in financing, initial plans for the bank had set aside roughly £4 billion for local authorities in a move that Chancellor Rishi Sunak said would not only assist the UK’s plans to ‘level up’ post-COVID-19 but also help to bridge the north-south divide. Four months into the bank’s existence, however, that promise has still not been delivered on.
According to Transport for London (TfL), despite the UKIB being “expected to start offering finance to local authorities, at rates cheaper than the Public Works Loan Board, from late summer 2021… no further details have yet been announced. ” Similarly, it was reported that the Local Government Association was unaware of any loans being offered to local councils.
The UKIB, however, insists that its financial offer to local authorities is up and running – with a spokesperson for the bank recently urging councils to get in touch stating that the “local lending function of the UK Infrastructure Bank is open and able to support local authorities in line with our goals to help tackle climate change and boost regional and local economic growth. ”
The situation has been further complicated by the lack of clarity on the UKIB’s website. Recently, the website’s “What we offer” page stated “Currently, we offer private sector financing. Once fully operational, we will invest in private and public sector projects as well as provide advisory services” – while still stating further down the page that financing was available to local and mayoral authorities. That page has since been edited, and the heading now reads “We now offer private and public sector financing. Over the coming months, we will work to establish our advisory services. ” Still absent from the website however is the eligibility requirements for local authorities looking to apply for financing, even though that information is available for the private sector.
Launched to essentially replace the European Investment Bank, the UKIB has been hampered by a lack of ambition and interest from the beginning. Only promising investments totalling less than half the yearly revenues of French and German infrastructure banks, leaning on pensions as a source of funding, and now failing to clarify the availability of funding – the UKIB already seems to be a doomed institution despite its potential to serve as a crucial support in an economically fruitful green transition.
The UKIB is meant to invest “billions of pounds in world-class infrastructure that will support people, businesses and communities in every corner of the UK,” according to Chancellor Sunak. Those ambitions, however, will only be realised if the bank itself is taken more seriously and inter-institutional communication improves.
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