BREXIT: Investment, skills should be infrastructure priorities post-Brexit, says industry group

The Brexit Infrastructure Group, which is led by the Institution of Civil Engineers (ICE), has suggested the UK develop a domestic alternative to the EIB as part of its 'three-point plan' for safeguarding infrastructure once the UK leaves the European Union. It has also recommended that the UK exploit its existing advantages in infrastructure innovation and technology through the government's industrial strategy.

The group, which was set up after last year's referendum to lobby the government on behalf of the infrastructure industry, warned that the UK risked a "self-inflicted skills crisis" if it did not guarantee the status of EU nationals working in the UK construction industry. It recommended that the government and industry work together to "map" the skills needed to deliver the projects currently planned by the government, and that the government should prioritise those skills in its post-Brexit immigration system.

"The government recognises the need to invest in infrastructure if Britain is to trade in a world outside of the EU and has committed to £330 million worth of infrastructure projects by 2020," said Richard Laudy, head of infrastructure at Pinsent Masons, the law firm behind Out-Law.com and a member of the Brexit Infrastructure Group. "However, Brexit risks a self-imposed skills crisis as currently 35% of our construction workforce comes from outside the UK."

"The government needs to start by guaranteeing the status of existing EU nationals working in the UK. The focus on apprenticeships and technical education is all to be welcomed, but it is a drop in the ocean compared with the additional 35,000 construction workers we need each year," he said.

Research by Arcadis, the engineering consultancy, found that the UK needs as many as 400,000 new workers every year until 2021, regardless of post-Brexit immigration issues, if it is to deliver all the planned projects in the government's National Infrastructure and Construction Pipeline. The government announced a number of reforms to technical education and apprenticeships, including the introduction of standardised 't-level' courses, at the Spring Budget earlier this month, although the impact of these will take some time to be felt by the industry.

The EIB provided over €30 billion in 'anchor' funding to UK infrastructure projects between 2012 and 2016, which acted to pull in substantial additional private investment, according to the report. The government should start consulting the industry now on "alternative options" to fill this funding gap, which could include a UK investment bank, according to the group.

The UK is currently one of the main shareholders in the EIB, with a 16.11% shareholding. Under EIB rules, only EU member states may be shareholders in the bank. The EIB has said previously that any change to the existing shareholder structure is "a decision for the member states". The EIB does lend to non-EU countries, but at lower levels.

The Brexit Infrastructure Group is chaired by Sir John Armitt. Members also include ICE director-general Nick Baveystock, Royal Institution of Chartered Surveyors (RICS) president Amanda Clark and Andrew Wolstenholme, the co-chair of the Construction Industry Council.

In a report last week, the ICE recommended that the government put digital transformation at the heart of its plans to improve energy, transport, water, flood defence and digital infrastructure, as outlined in its industrial strategy earlier this year. ICE also recommended that money from the UK's National Productivity Investment Fund should be targeted towards digital transformation in construction and infrastructure, and that major infrastructure projects be used as "incubators" for skills and innovation.