Despite
the Government’s strong commitment to improving the UK’s infrastructure, both
business and the public are concerned about the pace of delivery and a record
number of firms are dissatisfied with the state of infrastructure in their
region, according to the 2017 CBI/AECOM Infrastructure Survey.
With
the UK currently ranking 27th in the
world for the quality of its infrastructure, nearly all (96%) of the 727
businesses surveyed see infrastructure as important (of which 55% view it as
critical) to the Government’s agenda.
From
the Clean Growth Strategy and the £500 billion infrastructure pipeline to its
decision to build a new runway at Heathrow and press ahead with the A303
tunnel, the Government has made clear its commitment to British infrastructure.
However,
only one in five firms is satisfied with the pace of delivery (20%) and almost
three quarters (74%) doubt infrastructure will improve over this Parliament.
This lack of confidence is attributed primarily to policy inconsistency (+94%
of firms) & political risk (+86%). The digital sector is the exception,
however, where 59% of firms are confident of improvements.
For
the first time, this year’s Survey included the public’s views on
infrastructure. Their opinions closely mirror those of companies, as only 26%
of the public believe delivery is satisfactory and 76% doubt any improvement
will occur this Parliament.
Firms’
dissatisfaction with infrastructure in their region has increased – over half
(54%) are dissatisfied (or very dissatisfied), an 8 percentage point increase
on last year’s Survey.
Carolyn
Fairbairn, CBI Director-General, said: “We’ve seen a real commitment from the
Government on infrastructure over the last year, from decisions on Heathrow and
the A303 to pledges to scale up the supply of housing and clean energy. But our
survey shows this is not translating into optimism about future improvements
among both firms and the public, who are united in their concern about the pace
of delivery for new projects. We’ve now reached crunch time for the UK’s
infrastructure.
“As
the foundation for wider growth, world-class infrastructure is fundamental in
driving productivity, and helps create jobs and raise living standards. Our
message is as clear as it is simple – this is no time for discussion and
delays, it’s time for delivery. This needs to be heard not just by Westminster,
but by local and devolved governments, as making progress on smaller, local
projects is just as important as the bigger projects. Firms will not be
forgiving if this focus slips.
“With
continuing uncertainty over Brexit, it’s all the more important the Government
delivers quality infrastructure as a key pillar of a modern and effective
Industrial Strategy, from excellent quality gateways to the world to a funding
framework that gives investors the sustained confidence they need. It is a
vital lever for spreading prosperity across the whole of the UK.
“These
findings must not be confused with pessimism though. Businesses have been
unambiguous about what needs to happen, from delivering on the current road and
rail pipelines to putting in place an urgent long-term energy plan and making
housing a top priority. Firms are keen to work shoulder to shoulder with the
Government, bringing their construction and funding capability, innovation and
agility to the table, enabling the UK to face the future with confidence.”
Richard
Robinson, Chief Executive – Civil Infrastructure, Europe, Middle East, India
and Africa, at AECOM, said: “Given the strong correlation between
infrastructure investment and economic growth, it is hardly surprising that
when infrastructure decisions are delayed, it is UK business that feels the
pain. Indeed, the overriding message from business and the public in this
year’s survey is clear: more needs to be done to raise confidence and up the
pace in which infrastructure is delivered. Now is the time to provide clarity
around infrastructure investment and accelerate action.
“Transformational
infrastructure necessitates bold decisions and strong vision. The next five
years present a huge opportunity for the Government to set in train a lasting
legacy for future generations. The link between transport and long-term plans
for other vital infrastructure such as energy, water, waste and housing must
also be considered. A clear vision for integration will be essential to
accommodate the UK’s projected population growth and maintain economic
prosperity.
“Despite
the backdrop of Brexit and political uncertainty, we have certainly seen some
welcome progress this year, but it is essential that we don’t rest on our
laurels. The focus now must remain on progressing the UK’s ambitious
infrastructure pipeline. Schemes such as the third runway at Heathrow,
Crossrail 2 and the Northern Powerhouse programme are world-class projects that
provide bright beacons of British success and innovation and are vital to the
country’s ability to compete on a global stage. However, if we are to grasp the
opportunity to make major progress on infrastructure, the issue must remain
high on the government’s agenda, underpinning a modern industrial strategy.”
Devolution
is still seen as an opportunity, with 42% of firms believing it will lead to
improvements in infrastructure. But this figure represents a drop from the 2015
and 2016 Surveys (61% and 47% respectively), so it’s clear devolution must
translate into improved infrastructure results across the whole country.
With
close to two thirds of businesses (62%) not confident that the UK’s
competitiveness will increase by 2030 because of its infrastructure, skills
shortages have come to the fore as a critical area. Indeed, as the UK leaves
the European Union, firms see access to skills and talent from the EU as the
top priority for digital, energy and aviation in building a new relationship
(48%, 43% and 42% respectively).
Encouragingly,
over half of firms (51%) see new free trade opportunities with non-EU countries
as positive. Meanwhile, 45% of companies think that improvements in rail and
road access to ports and airports are critical for the UK to capitalise on a
new trading future. However, with infrastructure accounting for nearly half
(47%) of European Investment Bank investments in the UK, there is very little
confidence firms will receive similar funding post-Brexit – for example, 71% of
firms aren’t confident the roads sector will receive the funding it needs in
future.
