Member Article

Businesses want infrastructure focus from Government

Critical infrastructure improvements are not happening quickly enough and want to see urgent delivery from the Government, the latest CBI/KPMG infrastructure survey suggests.

‘Better connected, better business’ surveyed 568 business leaders over June and July, and identified transport infrastructure as the area of greatest concern.

The findings could indicate areas in which the UK fails to instil confidence in investors, as 61% of companies believed the UK’s infrastructure is less favourable than elsewhere in the EU.

Nearly three-quarters of firms did not expect to see any improvement in transport infrastructure during the next five years.

Around two-thirds of respondents also believe the UK’s energy and water infrastructure is unlikely to get any better due to uncertainty about the policy framework.

Companies were more positive about the UK’s digital infrastructure, as most commented on improvements in the last five years, and believed the next five years would bring more.

John Cridland, CBI Director-General, said: “The Government has shown it gets how important infrastructure is to the economy. It has put the framework in place but needs to show it can deliver on the ground.

“The new UK Guarantees are seen as positive by businesses, but firms fear initiative overload and are becoming impatient with delivery, leaving many companies still sceptical about the overall impact on investment.

“Whether it’s aviation capacity, electricity markets or funding our roads, the Government needs to take some big decisions which will have a major, lasting impact on inward investment and businesses’ ability to compete overseas.”

Regional variations were highlighted in the findings, as in London 77% of companies are satisfied with the UK’s domestic networks, while 56% of businesses in the North West and East, and 595 in the Midlands were unhappy with the quality of their UK connections.

Richard Threlfall, KPMG UK Head of Infrastructure, Building and Construction, said: “Actions speak louder than words, is the clear message of this year’s CBI/KPMG infrastructure survey. Business confidence in our infrastructure appears to be ebbing away. The key issue is how quickly can recent policy announcements translate into investment on the ground.

“We’ve seen real improvements in our digital infrastructure, but there’s continuing uncertainty over energy and transport investment. Everyone understands that the Government is constrained financially. But the right government interventions will encourage the private sector to invest.

“The launch of the UK Guarantee programme is welcome but it now needs to be implemented quickly. House building offers the fastest-acting pain relief for our economic headache. In addition, we need to re-introduce tax relief for investment in buildings and structures.

“The need for investment is enormous and individual schemes can be controversial. Delay is often attractive. But only by investing today will we create jobs, drive growth and remain competitive in the global economy. Now is the time to act.”

Elsewhere, the local road network was seen by 65% of respondents as being in decline, while 45% said they had seen improvements to intercity rail connections in the past five years. A positive balance (+64%) of firms believe the planned High Speed 2 line would have a positive impact on their ability to grow.

The Government’s recent announcement on relaxation of planning regulations seemed to have instilled confidence in some respondents, as 45% believed it would have positive impact, while 48% said it will not make a difference.

Overall, 97% of firms noted the UK’s planning system was a barrier to delivering new infrastructure.

This was posted in Bdaily's Members' News section by Tom Keighley .