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Political backing for projects counts for nothing without hard cash

Despite the huge number of really positive messages about UK government commitment to future capital investment coming out of last week’s Infrastructure Show, the reality is that too many businesses remain concerned about the here and now.

Yes, we heard about the multi-billion pound plans for High Speed 2, offshore wind development, the Thames Tunnel project, a new generation of nuclear power and for nuclear waste storage.

And we heard about the ongoing commitment to getting 60-plus projects through the Infrastructure Planning Commission process without hitch as it morphs into the Planning Inspectorate.

But we heard less about where the infrastructure spend will come from after current activity winds down in three or four years.

Right now the infrastructure project “here and now” is built around investment in Crossrail and in the regulated asset bases of Network Rail, the water companies and Heathrow airport.

As we see in this week’s focus on Scotland, there is also encouraging political noise and ongoing activity north of the border via the proposed £2.5bn investment in new roads, bridges, hospitals and prisons.

Yet even there it is clear that schemes such as the replacement Forth crossing or the M8 enhancements are some way off in terms of actual deliverable construction.

While the continued political support for the next wave of major projects is welcome, precisely when - or indeed if - real investment will flow remains far less clear.

“I fear, that unless a new wave of projects is suddenly switched on, many firms will simply go to the wall”

Right now the industry is pulling together to examine how we can reduce the cost of infrastructure delivery and to really underline the ways that investment in talent can drive forward the economy.

It is fair to say that, as highlighted by many speakers and exhibitors at last week’s show, businesses across the supply chain are investing in innovative delivery solutions.

However, none of this masks the stark truth that to stay in business they need clients willing to pay for that innovation. And right now the indications are that, across the UK, there are set to be fewer.

Hence the renewed global focus of so many firms as they adjust their strategies to take on new markets. Hence the new reality that, for graduates and young professionals, career progression lies increasingly abroad.

But not every company in the UK infrastructure supply chain is capable of, or even suited to, making such a shift.

I fear, that unless a new wave of projects, is suddenly switched on, many firms will simply go to the wall.
While our global firms may remain strong, when the UK economy does recover we will find ourselves much less competitive and with less talent than our international rivals.

  • Antony Oliver is NCE’s editor

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