Weak public investment an ‘institutional failure of the British state’ – report

A think tank has called for an end to political and fiscal incentives that harm public services and hinder economic growth.

Public investment projects constitute a fifth of all investment in the UK (Lynne Cameron/PA) (PA Archive)

A long-running cycle of weak public investment represents an “institutional failure of the British state” which has undermined economic growth and key services, according to a leading think tank.

The Resolution Foundation has called for fiscal rules which determine Government spending and tax decisions to be changed as a starting point for addressing the problem, but said removing decision-making on public investment from HM Treasury may also be needed.

The report – Cutting the Cuts – published on Thursday highlights that low levels of public investment have consistently placed the UK among the weakest third of the 38 OECD advanced economies in this area of spending and made the country poorer.