By Daniel Hunter
Despite promising improvements to infrastructure policy during this Parliament, political uncertainty means the UK is still some way off delivering the transformational upgrades the country needs, according to the latest CBI/URS Infrastructure Survey.
The survey of 443 senior business leaders shows that in key areas of competitiveness, like energy and transport, 67% and 57% of businesses respectively expect infrastructure to worsen in the next five years. Worryingly, respondents see the UK’s infrastructure as internationally weak too — lagging behind Australasia, North America and the EU, and with little improvement since the first survey in 2011.
These concerns come despite more than two-thirds of infrastructure providers viewing government policies such as the UK Guarantee Scheme and pro-growth planning reforms as positive developments. Such policies are seen as having increased the attractiveness of the UK as a place to invest in infrastructure over the course of this Parliament.
Asked what stands in the way of progress, almost all businesses believe political intervention is part of the problem, rather than part of the solution. 96% of firms said political uncertainty is discouraging investment and 93% identified political rhetoric as a problem, damaging confidence in markets.
To tackle this, businesses show overwhelming support for the creation of an independent infrastructure commission (89%), as recommended by Sir John Armitt, to help determine what the UK needs, and when it needs it. The survey also shows high levels of support for bold pledges in election manifestos from all parties to address key barriers to progress on issues like aviation and roads.
Katja Hall, CBI Deputy-Director-General, said:
“Progress on infrastructure has been a case of two steps forward and three steps back for far too long. While the policy environment has improved, businesses still don’t see upgrades to mission-critical parts of our infrastructure on the ground in practice — and don’t expect to anytime soon.
“Politicians are too often seen as ducking the big, politically difficult questions looming large on businesses’ risk register, like runway capacity and long-term road funding, rather than grasping the nettle.
“Where hard decisions have been taken on issues like energy, populist political rhetoric threatens to send us backwards. Just recently National Grid warned that spare capacity margins are at the lowest level in seven years, so building up investor confidence couldn’t be more important.
“We’re at a crossroads. The next government must build on the successful policies of this Parliament, but we also need to see bold thinking and a renewal of the politics of infrastructure, finding a new way to agree upon and then consistently deliver the improvements we’ll need over the next fifty years — not just the next five.
“The vast majority of businesses back the creation of an independent body to assess the UK’s long-term infrastructure needs. That 99% of firms think this would have helped the government make a more compelling case for HS2 demonstrates the powerful role a more independent voice could play.”
John Horgan, URS Managing Director, Europe, Middle East, Africa and India, said:
“There is a strong desire for a new approach to infrastructure that extends beyond the five-year electoral cycle. Business is overwhelmingly calling for the establishment of a neutral body to assess the UK’s long-term infrastructure needs. This would transform how infrastructure is planned and delivered across the UK, enabling capacity to be a step ahead of demand.
“Separating short-term politics from infrastructure decision-making would help end the stop-start investment that has so often stalled progress in the past. A long-term strategy with longevity of funding would give industry the confidence to recruit and maintain the skills required to deliver the projects the UK so urgently needs.”