The UK lags behind its major competitors in the quality of its infrastructure assets, with more investment vital for economic growth, according to the National Institute of Economic and Social Research.
In a briefing published yesterday, the think-tank says the government should intervene when there is market failure, and urges it to play a lead role as a provider, facilitator and financer of infrastructure projects and services.
It cites research showing that the UK ranks 24th out of 138 countries for its perceived quality of infrastructure, investing 4% less of its GDP than France, with likely knock-on effects stifling productivity and competitiveness.
"Infrastructure and GDP have a symbiotic relationship. The demands on infrastructure rise along with economic growth, and at the same time, economic growth requires high quality infrastructure facilities," the briefing says.
"The UK lags behind many major economies within and outside the European Union, so the case for infrastructure spending is clear, and the need for the government to get involved is compelling."
These concerns have been heightened since the Brexit vote, after the European Investment Bank invested around £31bn in the UK from 2012-16, with the possible withdrawal of funds leaving a vacuum that will need to be filled.
The briefing highlights how infrastructure projects that are cost effective and well designed, pay for themselves, even if it takes many years for the benefits to be felt.
It argues that investment in the UK has been plagued by long delays and cost overruns, often because of political considerations, and that a non-partisan body should provide the government advice without the distraction of political pressures.
In addition, it recommends that fiscal rules related to the budget deficit and debt targets should not crowd out investment spending, and that the government should stick to infrastructure spending commitments.
"Policy makers need to ensure that infrastructure spending decisions are based on sound evidence -based advice," the briefing says.
"The new National Infrastructure Commission (NIC) and the National Productivity Investment Fund are examples of policy action in the right direction, but more can be done.
"The NIC should be granted statutory powers, and the budget targets in the fiscal rule should focus on day-to-day spending instead of overall spending."
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