Newspaper article The Evening Standard (London, England)

With a Plan, Deighton Could Do It Again

Newspaper article The Evening Standard (London, England)

With a Plan, Deighton Could Do It Again

Article excerpt

Byline: James Ashton City Editor

LORD Deighton has already pulled off two amazing feats. By acting as the quiet man alongside Lord Coe in organising last summer's London Olympics and Paralympics, he was quite rightly enobled. His success in bringing the event in on time and on budget also makes him the most popular Goldman Sachs alumnus in the land.

But tackling his latest challenge might top the lot. As commercial secretary to the Treasury, Deighton is responsible for making sure the latest injection of cash that George Osborne has scraped together today makes a real difference to the long talked-about infrastructure projects where spades have yet to break the soil.

So much importance has been ascribed to building work to drag Britain out of the economic mire. But outside the crane-strewn capital, where Crossrail is steadily burrowing under our feet, there really isn't much going on. What difference would an extra [pounds sterling]3 billion make, or even [pounds sterling]15 billion over the next decade? Put that number in context. The creation of Infrastructure UK, an arm of the Treasury chaired by Paul Skinner, the former chairman of Rio Tinto, was confirmed in Osborne's emergency Budget in June 2010. The idea was to provide a stronger focus on long-term infrastructure priorities as some [pounds sterling]200 billion of building was planned over the next five years. Nearly three years on, precious little of that has progressed.

The Government should be contributing more, but the cupboard is bare. Business Secretary Vince Cable's timely call for higher borrowing to fund more big building projects would certainly increase the hard-hat quota.

But it isn't about just about providing the cash to set the wheels in motion, rather than persuading the private sector that now is the right time to invest. We need fewer flagship plans to pour money in here and there that never live up to the gloss of the launch presentation.

What is needed is a change of mindset to unclog the roadblocks to construction.

Bosses still grumble about the onerous planning regime and how long it takes to get decisions rubber-stamped. Money that could flow here is more readily spent abroad. Pension funds that were supposed to be stumping up [pounds sterling]20 billion for new rail infrastructure and flood defences are still waiting for something to happen. There are isolated incidents which show progress is being made -- such as Legal & General's investment in Cala Homes this week. It shows that building does have its attractions, but there need to be more cases like this.

Better still, to stimulate demand. That is why moves to make it easier for homebuyers to afford a mortgage sent shares in housebuilders sharply higher this afternoon.

Of course, all of this infrastructure work should have been in the pipeline more than two years ago so it could be deep into development to counter Britain's flatlining growth. …

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