Quality of infrastructure is key factor for 9 in 10 firms when investing
The majority of businesses (62%) are concerned with the pace of progress on the delivery of infrastructure projects, and over half (53%) believe they won’t see necessary upgrades in the next five years, according to the 2015 CBI/AECOM Infrastructure Survey.
With 94% of the 722 firms surveyed saying the quality of infrastructure is a key deciding factor in planning their investments, there is clear consensus on the need to speed up the delivery of projects crucial to the British economy in this Parliament, and to reverse decades of underinvestment and policy change.
Momentum has been building in the last five years. Business has been encouraged by the Government’s moves, such as the creation of the National Infrastructure Commission and the use of Government guarantees to boost investment. Indeed, now, twice as many firms (43% of all businesses and 49% of infrastructure providers) see UK infrastructure improving instead of deteriorating (23%). Devolution has also been greeted with optimism, with 61% of firms believing it will improve delivery of local infrastructure, rising to 73% among English companies.
There are £411 billion worth of infrastructure upgrades, fundamental to the UK’s future, which need to be delivered. These include a new runway in the South East (important to 91% of firms), upgrades to the rail network (45% of firms want spending increased), and investment in a diverse, secure energy mix (vital to 97% of firms).
For these projects to be delivered this parliament, Britain’s largest business group and the global infrastructure services firm, AECOM, want to see the Government tackle the thorny issues, and create a business environment primed to support delivery from conception to completion.
John Cridland, CBI Director-General, said:
“The arteries of modern Britain are working overtime. Whether it’s our creaking railways, clogged roads, and crowded runways, or our digital links and the energy to power them struggling to keep up, businesses now want the Government to deliver the large scale upgrades that it has made ambitious strides towards. The quality of infrastructure is a key factor in firms’ investment decisions, so businesses, communities and the whole country simply can’t afford the cost of inaction.
“Business and Government are on the same page on the need to invest in our infrastructure future, as we have seen with the creation of the National Infrastructure Commission. But that hasn’t stopped wrong turns being taken, like the reversal on Government support for renewable energy.
“Delivery of key projects – from where we build a new runway to how we power our industry and homes for the future – must be the crowning achievement of this Parliament. That doesn’t just mean taking the tough decisions for the long-term. It means better planning and having the right skills in place to ensure there is seamless continuity from when the green light is given for action to getting spades in the ground.”
Richard Robinson, Chief Executive – Civil Infrastructure, Europe, Middle East, India and Africa, at AECOM, said:
“Political procrastination over infrastructure threatens economic growth and jeopardises investment. When infrastructure decisions are deferred, business takes the hit. The challenge for Government is to build business confidence, fostering a financial and operational climate that accelerates delivery.
“Industry needs the Government to maintain a clear and consistent vision, and to have the courage to make politically charged decisions when they are in the long-term interests of the country. Delays and never-ending reviews of vital infrastructure stall progress and help nobody.
“Recent moves such as the creation of a National Infrastructure Commission and the mapping of expertise against the project pipeline through the National Infrastructure Plan for Skills are welcome initiatives. But more needs to be done to support the development of UK companies’ intellectual assets and to create an environment that encourages the development and export of organisational and technical skills. Only then will UK firms be better equipped to compete on the global stage.”