Think tank warns against urge to splurge on roads and rail but no word of water

Pro-markets think tank and notable influencer of Conservative policy, the Centre for Policy Studies (CPS), has urged caution in infrastructure spending only days before the Chancellor Philip Hammond unfurls his autumn statement. The CPS has promoted the use of project bonds to fund high priority infrastructure construction while shielding taxpayers from the costs. And in its analysis of the UK’s infrastructure options the word “water” is never used.

In its article Infrastructure can be a bad investment, the CPS, in the context of lavish expenditure pledges from president elect Donald Trump and significant similar announcements in the UK, asks whether the urge to splurge on infrastructure is “sensible.”

Th CPS wrote: “To ask these questions is not to suggest that today’s UK infrastructure is ideal. Much needs to be done in areas such as, for example, broadband, energy, (some) rail improvements, airport expansion and seaport development.”

Naturally the CPS advocates greater use of private investment in infrastructure projects and acknowledges that while private money does not guarantee success it does mean “the cost of failure is borne by private investors, not taxpayers.” It recommends the use of “internationally tested” project bonds – traceable securities through which private investors can participate in an infrastructure programme. CPS anticipates such bonds would demand a high yield but would “lead to significant improvements in the quality and efficiency of infrastructure projects.”