The government should involve pension funds in the financing of its economic infrastructure plans, London Pension Funds Authority (LPFA) chairman Merrick Cockell has stated.

Chancellor of the Exchequer Phillip Hammond highlighted investment in infrastructure as a “priority” for the government in today’s Autumn Statement. A new National Productivity Investment Fund of £23 billion, to be spent on innovation and infrastructure over the next five years, was subsequently announced.

The government will invest between 1 per cent and 1.2 per cent of GDP every year from 2020 in economic infrastructure covered by the National Infrastructure Commission, Hammond added. “To put this in context, we’ll spend around 0.8 per cent of GDP on the same definition this year,” he explained.

Cockell described it as “encouraging” that the Chancellor has identified infrastructure as a priority and that the government stated that it will work with the National Infrastructure Commission to determine areas of need.

“There is no shortage of funds to invest in UK infrastructure. What is lacking are the appropriate assets and the right deals to invest in,” Cockell said.

“Hopefully an economic infrastructure plan will include how to finance such developments and involve potential asset owners, such as UK pension funds, right from the beginning,” he added.

According to Hammond, about half of the country’s economic infrastructure is financed by the private sector, “and we will continue to support that investment through the UK Guarantees Scheme, which I am today extending until at least 2026”.

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