'Crunch time' for restoring business and public confidence

Greater focus on delivery of infrastructure is needed from government in this parliament, the CBI and AECOM have said, as they publish results of their latest infrastructure survey, which this year includes views from the public as well as business for the first time.

The 2017 CBI/AECOM Foundations for Growth report says 96% of businesses surveyed view infrastructure as important to government's growth agenda – 55% see it as critical - but only 20% business and 26% of the public are happy with the pace of improvement. Three quarters (74%) of businesses and the public (76%) are not confident that the condition of the UK's infrastructure will improve during this Parliament, the report says.

The CBI points to the government's £500bn pipeline of projects, its Clean Growth Strategy and £26 billion National Productivity Fund as welcome indications of an overall commitment to infrastructure. But the results of its Foundation for Growth survey show how critical it is that government sharpens its focus on delivery as part of its Modern Industrial Strategy, the CBI says. The report shows 62% of business do not think the UK's productivity will improve, with skills as the critical issue. Only 27% of business and 28% of the public are satisfied with infrastructure in their own region, which is a worsening picture. Overall dissatisfaction is up eight percentage points on last year.

CBI director general, Carolyn Fairbairn, said the survey shows government's commitment on infrastructure, evident from decisions on Heathrow, supply of housing and clean energy, is not translating into optimism among businesss and the public. "We’ve now reached crunch time for the UK’s infrastructure," she said.

“Our message is as clear as it is simple – this is no time for discussion and delays, it’s time for delivery," said Fairbairn. "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. 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 and as a vital lever for spreading prosperity across the whole of the UK," she said.

The survey findings must not be confused with pessimism, however, Fairbairn said: "Businesses have been clear about what they want the government to get on with now, and stand ready to work in partnership; whether that’s investing in our energy system or delivering the road and rail pipeline."

On Brexit, access to skills and talent from the EU is the critical issue for business. The energy sector is seen as most reliant on EU funding, but the roads market is least confident in receiving equivalent funding post-Brexit.

AECOM's chief executive for civil infrastructure in Europe, Richard Robinson, said: “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.

“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," said Robinson.

Key statistics by sector

Energy

• Setting out a post-2020 power sector investment framework is the top energy priority for the government, with 98% of firms citing this as critical or important, followed by supporting greater innovation (90%)
• After access to skills and talent from the EU (91%), the top Brexit energy priorities are the UK’s future vis-à-vis the Internal Energy Market (86% - rising to 92% for those who were energy providers), regulatory equivalence (76%), and access to funding, such as the European Investment Bank (75%)
• Nearly three fifths (58%) of firms are not confident that energy infrastructure will improve
• Almost half (49%) of energy providers are dissatisfied with the delivery and policy environment, a rise from last year’s Survey (42%)
• All energy providers surveyed (100%) said the government needs to set out a plan to provide a clear and long-term framework for energy policy – firms will therefore welcome the government’s recent Clean Growth Strategy.

Transport

• Delivery of the current Road Investment Strategy is the top transport priority for the government, with 92% of firms citing this as critical or important, followed closely by delivering improvements to local road networks (88%) and the delivery of the current rail enhancement programme, CP5 (88%)
• Regarding aviation priorities for a new relationship with the EU, 92% of businesses thought agreements between the EU and third party countries was a critical or important issue to be addressed, ahead of access to skills and talent from the EU (90%)

Transport providers are dissatisfied across the board with infrastructure delivery and the policy environment:

• Rail (61% of firms are dissatisfied)
• Roads (50%)
• Aviation (37% dissatisfied, but only 25% satisfied)
• A majority of firms are not confident transport infrastructure will improve:
• Road (68% of firms are not confident it will improve)
• Aviation (65%)
• Rail (61%).

Digital

• Improving the speed and reliability of connections is the top digital priority for the government, with 98% of firms citing this as critical or important. This is matched by the need to strengthen cyber resilience (98%) – however, over two thirds of firms (68%) are not (or not at all) confident in the UK’s current cyber security strategy
• After access to skills and talent from the EU (91%), the free flow of data (90%) and the digital single market (88%) are seen as the most important issues to address in forging a new relationship with the EU
• Digital bucks the trend when it comes to confidence in improvements, with a majority of firms (59%) feeling confident that digital infrastructure will improve.

Housing

Housing is a new sectoral addition to the 2017 CBI/AECOM Infrastructure Survey.

• Promoting housing as an infrastructure priority is the most critical housing priority for the government, with 90% of firms citing this as critical or important (of which 43% cite it as critical), followed by the delivery of more affordable homes (85%, of which 42% cite it as critical)
• Over four fifths (88%) of firms are not confident the government will deliver its proposals in the 2017 Housing White Paper
• Nearly two thirds (64%) of firms are not confident that housing infrastructure will improve.