Without the EIB, the UK could reset rules on infrastructure projects
Infrastructure is just one of the many areas that are currently tied up in the UK's relationship with the European Union.
It’s difficult to see, for example, how the UK can remain a shareholder in the European Investment Bank (EIB), the world’s biggest provider of climate finance, once it exits stage left. Some of the country’s biggest employers, including the CBI lobby group, are calling on ministers to create an infrastructure bank to channel public-sector cash, stimulating the investment of private-sector money into infrastructure such as transport, broadband, housing and green-energy projects.
In theory, a like-for-like EIB replacement should be straightforward to justify – the EIB has served the UK well, funding big-ticket infrastructure projects such as London’s Crossrail, the Northern Powerhouse Investment Fund, and major wind energy projects that have played a key part in establishing the UK as a world-leader in offshore renewables.
While it is not clear if the UK will withdraw from the EIB altogether, Chancellor Rishi Sunak’s goal of rolling out £640 billion of infrastructure projects over the next five years will depend on setting up a credible organisation to channel public-sector money and, in doing so, encourage private-sector capital investment.
At the same time as calling for a new infrastructure bank, calls to give project watchdogs more autonomy have been just as strong. But if the introduction of an infrastructure bank is made conditional on giving more teeth to watchdogs, they must also be asked to fundamentally rethink the norms by which they evaluate project performance.
If a new infrastructure bank is created, changes to the current infrastructure ecosystem need to take place. The ways in which project performance is evaluated, as well as the ways used to measure value creation need to evolve alongside the banking institutions themselves. Put simply, for a new bank to be truly successful, the rules of the game must be reset.
