As the first nation in the world to industrialise, the UK also has a legacy of needing to upgrade infrastrcuture that is in place. It's much cheaper when you start again. The German example of post-war building and China to day show what you can do when you start with modern methods in a fresh start.
The UK has also historically always underspent on infrastructure and under-planned its requirements. The political system enables all hard decisions to be put off. For years here we have written about non-decisions on nuclear power, new runways or a Servern barrier. Governments of whatever colour can easily decide on a a review that handily will not report until after the next election.
And when big decisions are made like the channel tunnel or HS2 planning laws, NIMBYism and apathy mean it is all very contentious and takes an age( mind you the Channel Tunnel did go bust o maybe the naysayers had a point...). Smalller projects fair better, enabling schools and hospitals to be replaced, albeit at eye-watering cost via PFI.
So the Government's decision to try and pump some more money into infrastrcuture spending is a good idea whose time came about a year or two ago, still better late than never. Although, as the Government has no money they are trying to be it by selling an soververign gaurantee insurance rather than direct spend. Whether this will entice private comapnies determined to hang onto any cash we will see.
Plus of course, so much of Government spending is not this type of capital investment. Billions go on social welfare, including the crazed tax credits, billions more on pensions and also the NHS. In effect the Governemnt has become a huge mechansim for redistributing wealth, not a mechansim for delivering a dynamic economy that grows and offers opportunities to all. Education, Infrastructure and Law and Order are the key components of a growth focused economy, but they are not the focus of Government spending.
Until this is remedied Britain is going to remain stuck as a low growth country; enduring a steady decline in living standards and economic prospects.