Three quarters doubt infrastructure will improve over this Parliament

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.

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 – more than half (54%) are dissatisfied (or very dissatisfied), an eight 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.”

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, more than 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.