The Government should create a bank to help deliver infrastructure projects and support the economic recovery, a leading business group is suggesting.

The CBI said the financial strain caused by the Covid-19 crisis must not be allowed to derail infrastructure spending plans.

Private sector investment can be a major driver of a “revolution” in infrastructure, said a report.

The CBI said since the “historic” Government plans unveiled in March’s Budget to spend £640 billion to revitalise roads, railways, broadband and housing, the pandemic had placed an enormous and unexpected burden on the UK economy.

The business group made a series of recommendations, including the creation of an infrastructure bank in the event of the UK ending its participation with the European Investment Bank, which provides infrastructure funding.

Other suggestions included giving additional powers to the National Infrastructure Commission and Infrastructure and Projects Authority.

Matthew Fell, chief UK policy director at the CBI, said: “Prior to the outbreak of Covid-19, businesses welcomed the government’s commitment to deliver an ‘infrastructure revolution’ and interpreted it as a clear sign that the government was serious about delivering on its levelling-up agenda.

“While the UK government’s commitment to delivering infrastructure remains undeterred, the country’s fiscal position has substantially worsened.

“In this context, the private sector now has an even more important role to play in helping to bridge the funding gap needed to deliver the government’s vision for UK infrastructure.

“To support its ambitious infrastructure agenda and provide better connectivity, at good value for taxpayers, the government must reinvigorate the UK infrastructure market tackling concerns about regulation and a lack of clarity about investment opportunities.

“The government must commit to an approach that gives confidence to investors and capitalises on the attributes of businesses and public sector establishing itself once again as a world class destination for investment.”