Today’s Financial Times reports:
The ruling UK coalition is preparing a “massive” increase in state-backed investment in housing and infrastructure, as Nick Clegg signalled a shift from lurid warnings by ministers about the debt crisis to a fresh emphasis on growth…
The Treasury could now use its balance sheet to underwrite housing and infrastructure schemes and to tackle youth unemployment.
He said some were “neurotic” about using the state balance sheet to assume additional risks on housing, transport and other projects and hinted that officials in the Treasury were hesitant. “From the top of government, a few weeks ago we decided this was the route we’re going to take. That’s the instruction we’ve issued to the Treasury,” he said.
Or in other words, the government’s hunt for a more effective alternative to PFI (i.e. a way of getting investment without hitting the government’s books in the short run) has taken another twist, adding to the pension funds initiative.