Wayne Butcher is a director in Grant Thornton's public services advisory team. He talks us through what it was like attending his first face-to-face event in over 18 months and the biggest takeaways from this year's London Infrastructure Summit.
I attended the London Infrastructure Summit 2021 on 14 September 2021 - it was the first face-to-face event I have attended in over 18 months and had lots of people doing all those things we took for granted until March 2020 – engaging in discussion over coffee, testing views and conversing on how the infrastructure market pushes forward post-pandemic.
It was a great event to attend, and I had the pleasure of being a panellist at the private sector capital session. From the session, I noted two key points, which I have set out below.
1 Funding and financing of services remains a key issue post-pandemic
Andy Byford from Transport for London thanked his organisation for keeping our journeys on track through the pandemic but noted that the financial position for TfL remains somewhat challenging. The pandemic showed the reliance on passenger revenue and how TfL's strategy is to diversify these income streams to shape a more aligned model to other global cities.
Diversification of income streams and what this may entail is the key question. Advertising and property income was mentioned, but it's clear that there is no clear solution for creating a resilient, sustainable future. Detailed thinking will be required alongside robust discussion with the government on TfL's future funding settlements. Only then can TfL strive to arrive at a position that allows it to prosper and have confidence in its financial future.
From Grant Thornton's perspective, TfL is not alone in this messaging. Local government is facing similar challenges, and collaboration on what works well will likely be required to avoid "re-inventing the wheel" each time and to tackle this problem collectively where commonalities do exist.
2 How we keep the pace up in the financing and delivery of infrastructure
The session I attended focused on private sector capital, maintaining momentum in financing transactions, and making the pipeline reality.
One of the key areas that came up again was aggregation. I had a detailed conversation with Julia Prescot from the National Infrastructure Commission and Lawrence Slade, the Global Infrastructure Investor Association CEO.
We all commented that aggregation is likely to play a role in leveraging critical mass and bringing together investors in an effective manner to finance projects where similarities exist in terms of geography, sector, risk profile, or other noted investment characteristics.
It has the potential to be used across a number of sectors spanning regeneration, transport and energy, and also play a major role in the net-zero agenda, which remains a primary driver alongside levelling up for this government. Lawrence noted that investors have money, but just for net-zero, the requirement for finance is around £50bn per annum, and it's not clear investors can keep up with that need.
At Grant Thornton, we have been part of a number of engagements where aggregation has been assessed in detail, but the key question is how we make this reality? We all agreed that close working between investors and government is needed to accelerate our ambitions in this area, but "how we crack that nut" remains unresolved at this stage.
If you work in public services and would like to discuss financing and infrastructure, get in touch with Wayne Butcher.