Aversion to risk and long payback times have resulted in
successive Governments failing to invest sufficiently in
Britain's infrastructure. Make UK's latest research,
“Infrastructure: Enabling growth by connecting people and
places” reveals that over half of manufacturers found a
deterioration in national road infrastructure over the last
decade, resulting in increased logistics costs and increased
difficulty around labour mobility and access to skills.
However, it is not all bad news. Digital infrastructure is
overwhelmingly the success story of the last decade, with the
previous Government investing heavily in 5G connectivity and
digital rollouts. Companies reported improvements nationwide
which helped them invest with confidence in digital technologies
for their businesses, resulting in a boost to productivity and
delivery of more good quality, highly paid jobs.
Our latest report interrogated perception on three specific types
of infrastructure: Road, Rail and Digital and how performance has
improved, or not, over the last decade. Manufacturers believe
that successive governments have put too much emphasis on cost
when valuing infrastructure projects, and not enough on their
potential benefit. While this is unsurprising, the investment
potential unleashed by the digital infrastructure investment, is
evidence that investment does work, turbo charging growth, the
drive at the heart of this new government's national improvement
plans. In the 1980s, the channel tunnels, famously over budget,
were heavily criticised as a concept but now Eurostar journeys
contribute around £4bn to the UK economy annually.
The new research revealed that regional differences remain, with
the North of England still more critical of the state of road
infrastructure than anywhere else in the UK. Manufacturers in the
North West are the most pessimistic about road infrastructure
with 68% saying roads have deteriorated over the last decade. But
in the North East, just 43% of companies feel road links are
worse. This divergence is probably because while cities like
Manchester have made great strides in progressing transport
infrastructure for public use, it may have come at the expense of
reduced road investment.
Over half of manufacturers (57%) disagreed with the
decision to axe the northern leg of HS2, and unsurprisingly
companies in the north of England were the most upset at its
loss, with 61% of businesses saying the decision was the wrong
one.
Stephen Phipson, CEO of Make UK said:
“Following years of underinvestment this new Government now needs
to be bold on its infrastructure investment and realise the
productivity improvements of doing so. At the top of this agenda
must be repairing our roads with British manufacturers wanting to
see an immediate focus on A roads and Motorways. To help make
this happen, manufacturers want to see more local decision making
and support for local authorities to speed up planning processes.
“Increased investment in local bus networks to connect
out-of-town areas would also give more young people the chance to
work in the well-paid manufacturing sector, while long term rail
projects are desperately needed to connect more east-west
connections to truly deliver an equal share of opportunities
around the whole of the UK.”
Policy Recommendations
- Commit to long-term infrastructure projects to ensure the UK
is attractive for FDI
- Speed up planning processes by giving increased powers to
local authorities/mayors to build local infrastructure faster,
such as tram networks, and road repairs.
- Progress the Fair Funding Review's proposals to increase
retention from business rate (or any newly established property
tax) receipts so local authorities can flexibly plan long-term
investments in infrastructure.
- Repair existing road networks to ensure manufacturers can
access logistics and skills, with a focus on A roads and
Motorways in the UK.
- Invest in local bus networks that connect to out-of-town
areas more frequently to enable younger people to reach
manufacturing businesses.
- Long-term rail projects should create more east-west
connections to generate a more equitable share of opportunities.
- Rail freight stations and depots should be better integrated
with road networks to ensure this mode of transport is an
attractive choice for manufacturers.
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Read the full report here: https://www.makeuk.org/home/insights/reports/2024/08/15/make%20uk%20latest%20deep%20dive%20into%20the%20state%20of%20uk%20infrastructure%20is%20out%20now
