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News » UK » Three-quarters of firms gloomy about infrastructure prospects » published 4 Nov 2016

Three-quarters of firms gloomy about infrastructure prospects

Three-quarters of businesses doubt the UK's infrastructure will improve over the next five years, according to the 2016 CBI/Aecom Infrastructure Survey.

Two thirds of those firms surveyed suspect it will hamper the country’s international competitiveness in the coming decades.

However, 44% believe the UK’s infrastructure has improved over the past five years,

Some 728 companies participated in the survey, conducted last summer, of whome 44% identified themselves as a "provider of infrastructure". The remainder were either investors in or users of infrastructure. 

Delivery of key projects already in the pipeline emerged as the top priority among the firms surveyed, including:

  • £38bn of investment in the rail network through Control Period 5 (a top priority for 99% of respondents);
  • £15bn of investment in the UK’s motorways and A-roads through the Road Investment Strategy (97%);
  • A new runway in the South East (85%); and
  • HS2 (80%).

The Government’s recent track record has encouraged firms. Infrastructure is regarded as a core part of the country’s long-term economic agenda since 2010, and 42% of firms see the policies undertaken since the start of the 2015 Parliament – such as the creation of Transport for the North – as positive steps.

However, confidence that overall infrastructure will improve in the coming five years has fallen 16 percentage points since the 2015 Survey (from 43% to 27%).

A significant majority of firms are not optimistic that infrastructure in aviation (74%), energy (73%) and roads (69%) will improve, with only digital bucking the trend (59% of companies expect improvements in this area).

Moreover, the majority (64%) of firms feel the UK is unlikely to be more internationally competitive in 2050 than it is now, and 46% are dissatisfied with the current state of their local infrastructure.

Carolyn Fairbairn, CBI director-general, said: “Infrastructure is a key driver of productivity and living standards. 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. It isn’t right that nearly one in two firms are dissatisfied with their region’s infrastructure, or that confidence in the future is running low, especially when it comes to delivery, the key piece of the infrastructure puzzle.

“So, our message is a simple one: at the end of the day, delivery is what matters. It’s great the Government is taking the decisions for our long-term future prosperity, like giving the green light to the new runway at Heathrow, Hinkley Point and improving digital connections. Businesses also need clear, deliverable timetables for action on major national projects – like Control Period 5 and the Road Investment Strategy – in order for them to act as magnets for investment, growth and jobs.

“If we don’t get spades in the ground on existing plans, it’s clear we could put a major dent in the competitiveness of British business – and the UK itself. This is something we cannot afford to do, especially during this period of uncertainty as the UK leaves the EU. Firms are ready and willing to work with the Government to develop the skills and capacity to deliver on plans.”

Richard Robinson, chief executive for civil infrastructure at Aecom said: “As the UK plans for post-Brexit scenarios, the role of infrastructure is more vital than ever. Competing more directly on the global stage requires strong foundations to secure the nation’s international standing.

“Developing truly world-class national infrastructure is therefore of paramount importance. It will enable British industry to innovate, expand and flourish, strengthening the UK’s reputation as a good place to do business. High-profile, transformational projects such as HS2, Hinkley and Heathrow are vital but must not be prioritised to the detriment of the Highways England and Network Rail schemes that keep our country running.

“At a time of uncertainty, clarity around infrastructure investment and delivery will boost business confidence. The UK has a long history of successful major infrastructure projects, leading the world in creating innovative new delivery models. Schemes such as Crossrail and Tideway are beacons of best practice around the globe.

“Fortunately the UK has moved on from the era of under-investment in infrastructure. Since the start of this decade we have seen a revitalised commitment to infrastructure investment and its transformative power. The focus now must be on delivery.”  

MPU

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This article was published on 4 Nov 2016 (last updated on 4 Nov 2016).

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