The UK's Chancellor of the Exchequer, George Osborne, has confirmed that the Government has indentified over 500 infrastructure projects it wants to see built over the next decade or so – and it wants UK pension funds to foot some of the bill

In his Autumn Statement to the British Parliament on 29th November, the Chancellor explained that some of the money used to build new infrastructure, about £11bn, would come from budget savings and future spending commitments.

A large chunk is expected to come from private finance and Osborne hopes to find at least £20bn of private investment – from UK pension funds.

In order to try and help make this a reality, the Government has signed a Memorandum of Understanding with the UK's National Association of Pension Funds (NAPF) and the Pension Protection Fund (PPF). In his statement, he claimed that he had "negotiated an agreement with two groups of British pension funds, to unlock an additional £20 billion of private investment in modern infrastructure".

The purpose of the agreement is to help create a new investment platform that will enable pension funds to collectively invest in structures such as new transport links and broadband networks.

"We need to put to work the many billions of pounds that British people save, in British pension funds, and get those savings invested in British projects," said Osborne. "You could call it 'British savings for British jobs."

"We can today give the go ahead around the country to 35 new road and rail schemes that support economic development."

UK pension funds are not known for their infrastructure investment. Pension Funds Online holds data that shows that the Government's plans are ambitious, with only 1.6% of the UK's top 1000 schemes invested in infrastructure to any significant level.

First published 29.11.11

mhandzel@wilmington.co.uk