Growth Agenda
Karl Eddy, Head of Government Infrastructure Advisory at Grant Thornton, reacts to the Autumn Statement
"The Chancellor is right in targeting mid cap firms through the National Loan Guarantee Scheme and in looking at the business finance partnership. It shows a deep understanding of the market needs in starting to move towards growth.
"What is central now is the implementation: moving through the state aid process quickly and ensuring that the mechanism through which firms can access support is simple and visible – using services like the Manufacturing Advisory Service and Business Coaching for Growth programmes could play a really important role in making this happen.
"The introduction of capital allowances on the Enterprise Zones in Liverpool, Sheffield and the Black Country is welcomed. We know from the previous Enterprise Zone programme that the availability of allowances was the most important incentive to encourage development – it should make a real step change in the development of these zones."
Delivering growth
Manufacturing Advisory Service (MAS)
Grant Thornton was recently selected to deliver this service as the lead member of a consortium. The service will provide strategic and technical advice to help manufacturing businesses grow, to improve their position in global supply chains and to link up with apprenticeship schemes. The new MAS will help create £1.5bn in economic growth and 23,000 jobs in the sector.
Business Growth Fund
The Government's commitment to growth represents further opportunities for businesses struggling to access finance. Next year we will start to see benefits from the Business Growth Fund, a major £2.5 billion equity investment capital fund backed by five of the largest banks in the UK.
Business Coaching for Growth
Also set to launch in January 2012 is Business Coaching for Growth. This is a new programme to help up to 10,000 high growth businesses a year to address barriers to growth and grow more rapidly. The project will be delivered across England and aims to help 26,000 businesses and generate £2 billion growth.
Local Enterprise Partnerships (LEPS)
The extra £1 billion in the regional growth fund (RGF) and 100% capital allowances for six enterprise zones are welcome measures, but critically the government needs to ensure that these resources can be applied to projects on the ground rapidly, which hasn't happened so far, particularly with the RGF. This will involve helping LEPs to enhance their delivery capacity, so that they are in a position to drive these growth packages and potentially play a role in other key mechanisms for growth such as credit easing. Empowered LEPs can bring effective access to, and understanding of, local networks through which these measures can be applied. Without this, measures such as those announced today can make little impact in the short, and even medium term.
Infrastructure
Neil Rutledge, Government Infrastructure Advisory Partner at Grant Thornton, reacts to the Autumn Statement
"While other countries are applying ideas originally created in the UK for involving private finance in the provision of new infrastructure with enthusiasm, the current UK government appears, with its recently announced review, to have lost faith in the Private Finance Initiative (PFI). "With long-term bank finance expected to be available only on unfavourable terms, now is a good time to look at new financing approaches, with the holy grail being to find a means of packaging infrastructure loans in a way that meets the needs of those wanting to invest long term, namely pension funds and other institutional investors. Government is looking at ways to achieve economies of scale by bringing groups of pension funds together to support investment in UK infrastructure, much as we have seen in countries like Canada and Australia.
"Given the uncertainty associated with any government review, what is clear is that the UK economy needs the Government to put its shoulder to the wheel to ensure that the 40 priority projects identified today out of a pipeline of over 500 are pushed through.
"To date, delays have been all too common, whether from vacillation by Whitehall or 'own goals' from refusals by local authorities' own planning departments – often responding to local NIMBYism."
Energy
"With a total capital requirement estimated at £117 billion, we calculate that over a million jobs could be created if all the pipeline schemes are delivered. The challenge will be to ensure that as many of these as possible benefit the UK economy, rather than overseas suppliers."
Waste
"The inclusion of 38 waste projects in the pipeline reflects the dual benefits that this infrastructure brings to local communities: managing waste in a modern, sustainable way that avoids landfill; and generating significant amounts of energy which local authorities can use directly to light our streets, or sell to fund other services. The 13 energy-from-waste schemes currently in procurement will prevent four million tonnes of residual waste from being sent to landfill and will create 320MW of electricity, that's enough to provide for 16,000 household for a year."
Transport
"According to Network Rail, passenger miles are greater than at any time in the last 60 years and are still increasing. Following a slowdown at the beginning of the recession, passenger journeys are continuing to grow at a fast rate. Since the railways can barely cope with the traffic they have now, the Chancellor has announced today a priority programme to develop Britain's rail infrastructure. Meanwhile Britain's roads are also struggling under the weight of traffic. With a total capital requirement of nearly £90 billion, the proposed transport pipeline, if delivered, could add over 200,000 jobs."
Notes to editors:
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