Traffic congestion and a continuing lack of investment in the highway network were this week labelled as the biggest barriers to growth in business lobby group CBI and financial consulting giant KPMG’s annual infrastructure survey.
The survey of 568 business leaders says that 95% of firms were concerned about the impact of congestion on their businesses, with 96% believing that the condition of local roads had not improved over the last five years. The motorway network fared a little better with 80% reporting no change and no deterioration in its condition.
“We need to find ways to speed up the procurement process,” said CBI director general John Cridland. He added that, while there were plenty of schemes in the pipeline, the government had failed to clear barriers to getting projects built.
“I have previously banged on about the need to take action on, for example, the A14, and government has said it will prioritise the scheme,” he said, referring to prime minister David Cameron’s pledge in March to use road tolls to finance it.
“But I’m disappointed that this will still mean six years of planning,” he added. Cridland said it was “startling” that 97% of firms surveyed said the UK’s planning system was to blame for the stagnation of new infrastructure delivery.
The government recently announced that it intends to use its balance sheet to underwrite infrastructure schemes and to speed up planning for large-scale business and residential schemes. But Cridland said lack of action since the announcement had left businesses “still sceptical” about their impact.
Commenting on the survey findings afterwards, RAC Foundation director professor Stephen Glaister agreed that the government had yet to deliver on major promises, specifically those made about roads spending by Cameron in March. While the government says “very clearly” that there is a need for “rapid spending” on infrastructure, said Glaister, it remained “unwilling” to contribute taxpayers’ money. “It is hoping the private sector will step in, but that is not happening.”
Overall the survey reported that just 35% of businesses were confident that the coalition’s infrastructure policies will have a positive impact on investment. This was down 10 points on last year. Cridland said that action was needed across the sectors, but that roads were top of his list of deliverable schemes. The A14 upgrade remained the highest priority.
In addition he said that the A303 improvements in the South West, the A1 Western Bypass to connect Newcastle to the major road network and the A160 Immingham improvements were key to reducing congestion.
KPMG head of infrastructure, building and construction Richard Threlfall said ministers must act to kick start projects and “get diggers on the ground”. “In general the UK’s infrastructure is regarded by business as not good enough and they are not confident that it will get better,” he said. “There is now a good environment [to kick start infrastructure projects],” he said, referring in particular to the government’s recent announcement that it would underwrite £40bn of project funding via the UK Guarantee Programme and its moves to streamline the planning system. “But in reality nothing has really happened.”
Reflecting on the survey findings, Glaister warned that financial guarantees would fail to stimulate road investment without a funding stream – the A14 scheme is the only proposed development to consider such a model. Threlfall also said the survey highlighted the need for government action to kick start major energy projects such as the new nuclear build project at Hinkley Point and the Severn barrage proposals.
With 61% of businesses saying UK transport infrastructure is below average internationally, Threlfall said projects such as the Mersey Gateway crossing and High Speed 2 must be supported by government interventions. In water, Threlfall also highlighted the Thames Tideway project as a nationally significant scheme that could benefit from government support. He urged that action be taken to encourage more private sector investment since, following the summer water supply restriction, 69% of firms said they were had no confidence that water infrastructure would improve in the next five years.
In addition, 48% of businesses reported concern over the government’s aviation policy. “Aviation is the lagging area of policy and we are not happy about that,” said Cridland.