Out-Law News 2 min. read

Survey sets out business concern over future of UK infrastructure


The percentage of business leaders that believe the UK's infrastructure will improve by the end of the decade has dropped dramatically in the space of a year, according to an annual survey.

Report authors Aecom and the Confederation of British Industry (CBI) attributed the drop to increased uncertainty following the UK's vote to leave the EU and the formation of a new government. Only 27% of firms anticipated an improvement in UK infrastructure by 2020, down from 43% last year; while 64% said that the UK was unlikely to become more competitive in the longer term, to 2050.

Survey respondents were particularly concerned that aviation, energy and roads-related infrastructure would not improve by the end of the current parliament, with these categories receiving 74%, 73% and 69% of responses. However, 59% of respondents said that they expected digital infrastructure to improve over the same period, following a trend in recent surveys, according to the authors of the report.

Responses were recorded between May and July 2016, with the EU referendum falling in the middle of the data collection period, according to the report. This means that all responses were received before Theresa May's government confirmed its support for a third runway at Heathrow, and before further details of the future constitution of the National Infrastructure Commission (NIC) were published.

"Infrastructure is a key driver of productivity and living standards," said Carolyn Fairbairn, the CBI's director-general. "Day in, day out, Britain's businesses rely on our roads, railways and runways to move their goods, services and people up and down the country."

"Firms give the government a good report card on infrastructure, and are pleased with its commitment in recent years to put infrastructure at the heart of its long-term economic agenda ... But announcements and commitments are one thing. Seeing tarmac, tracks and super-fast internet cables being laid is another," she said.

The survey found that the government's recent focus on infrastructure-related announcements was beginning to have results, with 44% of respondents stating that UK infrastructure had improved over the past five years. Respondents also said that the government's infrastructure policies had had a positive impact to date; with 42% welcoming initiatives such as the creation of the Transport for the North advisory body and related funding; the Roads Investment Strategy (RIS) and the UK Guarantee Scheme.

To maintain this level of confidence, respondents called for "continuity" from Theresa May's government ahead of the negotiations to leave the EU. Almost every respondent backed the delivery of programmes of work such as the £38 billion Control Period 5 planned funding for rail investment and the RIS ahead of other nationally significant infrastructure projects such as the planned national high speed rail line, HS2. None of the projects in the existing pipeline of projects received a higher than 20% negative response.

"These results indicate that rather than committing to a new raft of infrastructure projects to provide fiscal stimulus, what business wants to see is a reaffirmation to deliver on existing plans," CBI and AECOM said in their report. "By sticking to its spending plans for the UK's roads and railways – and ensuring they are delivered in full over the course of this parliament - the government can provide the right foundations to help business drive growth and prosperity across the UK's regions."

"This should include pressing ahead with major infrastructure projects, like HS2, alongside incremental improvements to our road networks, building on progress already made in areas such as setting a delivery date for the A14 improvement scheme. Business is ready to partner with government to develop the skills and capacity to deliver these plans; if government is to shift the dial on the five-year outlook, it is critical that certainty about future capital investment plans is provided as soon as possible," they said.

The majority of respondents, or 84%, highlighted the need for action on skills shortages as a priority of the government's newly-created Infrastructure and Projects Authority (IPA). Removal of barriers to private financing emerged as the second priority for industry, with 78% of responses.

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