The Prodi High Level Task Force
As a follow-up on the AER conference on sustainable financing for the regions, AER will be publishing a series of articles on investments. These will provide deeper insight on the different financing tools available for regions, which were presented on the occasion of this conference.
Maximising public value
AER is participating in the work currently being carried out at European level on long term investments. On the occasion of the Spring plenary meeting, Jonathan Watson, Managing Director of the Think Tank INTEGRATE updated AER members on the EC High-Level Task Force on financing social infrastructure and maximising public value, also called the Prodi High Level Task Force. This Task Force is providing inputs to the Commission on how current instruments should be completed in particular in the field of long-term investments for health, education and housing.
This Task Force was set up by the European Association of Long Term Investors and the Think Tank Integrate and is supported by Jirki Katainen and the European Investment Bank. The Chair of the High-Level Task Force is Romano Prodi and Deputy Chair is Christian Sautter. Two working groups are working on current investment patterns in the public sector by sector and by geography on one hand and future patterns on the other hand.
AER member region Arad (RO) is contributing to the work of the first working group, it is possible for another region to contribute to the group which will look at future patterns.
Reworking how the public sector mobilises finance for social infrastructure
The High-Level Task Force for Social Infrastructure investment while maximising public value formally launched in February 2017. While there is undoubted interest in what the dialogue it moderates between social and financial sector experts will say when the final report is delivered in December 2017, it is not about changing current regulations. Instead it will focus on doing things differently in order to
- overcome the current shortage in social infrastructure investment especially for lifelong education, health and social care and affordable housing
- address the gap in the finance industry’s ability to arrange financeable social infrastructure projects on behalf of the public sector.
Help secure the inflow of investable projects
A common message is already emerging. There is a need to include new measures that will help secure the inflow of investable projects to the various funds available: public, private and third sector. These new measures have yet to be identified and agreed but a key challenge that will remain at the end of the Task Force exercise will be how we ensure the generation of credible investment opportunities that are to scale and how to better blend different funding streams during a project’s lifecycle. For example, it has been suggested that the pipeline of EFS projects can be improved by creating investment platforms that bring together smaller projects from the same sector. This tool needs other tools and resources because it won’t succeed alone.
For the public sector a particular issue is how it mobilises finance for social infrastructure. This needs some reworking in ways that unlock social infrastructure investment from political cycles. Specifically, it involves adopting prevention as a strategic principle for planning and investment, finding ways to improve local capacity to absorb capital and knowing how to ‘sell’ the added value from social infrastructure investment.
The presentation on the Prodi High Level Task Force at the AER plenaries in London will be followed up by a workshop in Brussels in September which will consider exemplar pipelines (R20, European Fund for SE Europe, the High Road Predevelopment pipeline) and what needs to happen to improve the generation of projects locally including a role for intermediation platforms with non-profit dealmakers.
If your region is interested in contributing to the work of the High Level Task Force, please contact AER Coordinator for Policy and Knowledge Transfer Johanna Pacevicius.