EXPERT HUB – REPORT: Investment and infrastructure. The first report of the Purposeful Finance Commission

by: Inclusive Growth Contributor | on: 06.11.23 | in: Uncategorised

By the Purposeful Finance Commission

The UK is a starkly unequal place. This should not come as a surprise – numerous studies have noted deep disparities between UK regions, a London-centric investment landscape, and other rural-urban divides.

Successive governments have struggled with addressing this inequality, most recently through the ‘levelling up’ agenda set out in a white paper, grouped in 12 ‘national missions’ including commitments to improve living standards, housing, transport infrastructure and devolution. More recently, reforms to Solvency II and other proposed financial reforms have been touted as an opportunity to unlock billions of pounds currently held by insurers, pension funds, and other finance organisations for productive investment in a wide range of assets.

Given this potential influx of capital, there is clearly an opportunity to re-examine the current regeneration landscape and ensure that there is an adequate supply of both the capital required and suitable investment-ready propositions being brought forward. This new approach must incentivise investment into projects with demonstrable social value, especially in areas that have historically missed out.

The need to level up the country, combined with other policy initiatives including the transition to net zero will require significantly higher levels of investment into infrastructure in the years and decades to come. Thus, a range of factors have come together at this time that highlight the need for research into how infrastructure projects can best be delivered, where they run into issues, and how or why they can fail, as well as recommendations about how to address the obstacles. Getting this right means an enormous opportunity to invest for the future, creating new jobs, opportunities, and economic growth.

To this end, the Purposeful Finance Commission was convened to provide a forum for local government organisations, including major combined authorities and membership bodies, to engage with investors, academics, and each other, to identify, understand, and suggest ways to overcome these barriers. More broadly, it was an opportunity to consider what this new investment landscape, which we have termed purposeful finance, might look like. To do so, we first analysed where investment in this type of infrastructure has flowed to date.

This first report aims to set the scene for understanding which areas of the country have been most successful in attracting private capital, through the analysis of existing data. More importantly, however, this research brings together first-hand accounts of those involved in all aspects of the investment lifecycle and reports the results of a series of roundtable discussions held across the country, representing over 40 different individuals and organisations involved in either developing regeneration projects or financing them, from both the public and private sectors.

Read the first report of the Purposeful Finance Commission – Investment and Infrastructure here.