The UK government has announced it will underwrite £40bn in infrastructure investment in a bid to boost the economy.
The move is intended to restart stalled projects in Scotland, Wales and England. The cash will help release private sector funding, in the place of hitherto hoped for private sector investment.
The UK Guarantees Scheme will also be supplemented by an additional £10bn to help boost exports throughout the nation.
The announcement from Chancellor George Osborne comes on the back of the UK’s growth forecast being cut. Earlier in the week, the IMF slashed its forecast for the year from 0.8 per cent to 0.2 per cent.
Before investment will be advanced, interested parties will have to meet strict criteria.
For example, the work will have to begin within 12 months, provide good value to the taxpayer and have a demonstrable positive impact on future economic growth. There will also be a charge for the finance.
Many projects that were halted have already got underway in recent months. Helped by other financial strategies such as invoice factoring, many initiatives in Scotland have been restarted.
The cross sector plans will likely provide a boost in many areas.
However, an Institute for Public Policy Research senior research fellow warned that any benefits may take some time to filter through. Kayte Lawton said:
“[12 months] will be quite a long time to have to wait for people who have already been out of work for 12 months or a year.”
While applauding the move in general, she went on to say that short-term measures would also be welcome in Scotland and throughout the rest of the UK.