Is UK infrastructure investment off the rails?

A survey says almost two thirds of businesses aren't impressed by the UK's infrastructure - no surprises there. How to fix it, though, is another question.

by Emma Haslett
Last Updated: 09 Sep 2011
We all know ‘the wrong kind of snow’ is an international joke, and it’s a rare commuter who hasn’t spent part of their life with their nose wedged into a fellow passenger’s armpit. So it’s no surprise that a survey has suggested that 58% of businesses in the UK rate its infrastructure as ‘worse than other EU countries, when judged on quality, value for money and reliability’. Which is putting it lightly. The survey, by the CBI, found that businesses are desperate for the Government to put some extra investment into the UK’s infrastructure network. Although in straitened times like these, that’s easier said than done.

The survey, of 447 businesses, found that 65% of businesses think the local road network has deteriorated over the past five years (although we’d add that part of that is to do with the unusually cold winters we’ve had). Not unexpectedly, 46% say the commuter rail system has got worse, while only 22% said they’d seen an improvement. Most worryingly, a staggering 95% said they’re worried about the rising cost of energy over the next five years. In fact, the only thing that came out of the survey even remotely well was broadband, which 73% of businesses say has improved. That’s a relief.

So what’s causing the problems? According to 98% of businesses, it’s the UK planning system, which they see as a barrier to the development of new infrastructure – 69% say it’s a ‘significant’ barrier. The good news, of course, is that the Government is attempting to make swingeing changes to the rules – although there’s no guarantee they’ll be approved, considering the might of critics like the National Trust. Still, at least the Government knows any changes will be fully supported by businesses. In an attempt, presumably, to rally the troops, one housebuilder today called the current laws a ‘living nightmare’.

To be fair to the Government, it has already identified that £200bn needs to be spent on infrastructure over the next five years – although, 70% of that is expected to come from private sector firms. Having said that, though, the survey found that only a quarter of businesses think the UK is a ‘favourable’ destination for infrastructure investment. So the Government might not get quite the reaction it had hoped for. And considering the state of the country’s finances, chances that the Government will be able to plug that gap are relatively slim.

Still – an update on the Government’s National Infrastructure Plan is due in the autumn. So we’ll have to wait until then to find out how it’s planning to tackle challenges like that.

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