Think tank warns against failure to invest in public infrastructure
A think tank has warned there could be a “tsunami of a public sector recession” in Britain if there is a decline in public spending.
The New Local Government Network - an independent think tank that aims to empower local communities - said there was an impending threat of Britain being thrown into an "era of crumbling infrastructure".
The association’s Capital Contingencies report published yesterday said that councils should consider issuing bonds against their asset base, which is around £250bn, as a means of raising finance to fund infrastructure.
It said that councils should be required to invest in public infrastructure, so as not to hinder the future renovation of public services.
It also recommended that local authorities should implement user charging, such as workplace parking levies to help fund transport developments and set up a combined fund for council reserves to assist infrastructure investment across Britain.
The association said failure to invest in public infrastructure was a real concern considering that public sector spending cuts are on the way and revenues are already decreasing. The Treasury’s target by 2013/14, is to cut the capital expenditure in halve from £44bn to £22bn.
The association’s director Chris Leslie said he believed that councils’ “great assets and reserves hold enormous potential for domestic reinvestment.”
He said: “We see it as vital that making more of these powers and assets form the vanguard of future local-driven investment.” Leslie also urge councils to prepare for the “looming political obsession with national debt which could see the treasury cutting capital grants and loan availability severely.”
