‘Invest in infrastructure now – or we’ll all suffer,’ firms tell government


London’s businesses have expressed concern about the state of the commuter rail network in a new UK-wide survey.

Sixty-one  per cent of those surveyed in London said that the local rail system had deteriorated in the past five years, highlighting acute strains on the capital’s transport system.

The CBI/KPMG Infrastructure Survey 2011 reveals that the UK government needs to act now to tackle the UK’s infrastructure problems or risk losing out on foreign investment.

According to the survey, 58 per cent of the UK’s businesses rate the UK’s infrastructure as worse than other EU countries. And they’re not alone. The World Economic Forum Global Competitiveness Report has placed the UK 28th for quality of infrastructure.

The CBI demands that the government acts now to attract vital new investment to the UK’s ageing infrastructure. In-depth assessment followed by targeted investment from the private sector could ensure that the UK remains internationally competitive and accelerates growth, the CBI says.

“The last generation underinvested in infrastructure,” said John Cridland, director general of CBI. “We have a lot of ground to make up as we are lagging behind other countries.

“Business confidence is low at the moment but generally balance sheets are healthy – we need to persuade businesses to put their balance sheets to good use.”

Development of infrastructure could strengthen the economy in both the short and long term, according to CBI.

“New infrastructure puts spades in the ground now and gives business a chance to do new things in the future – it’s a real game changer,” said Cridland.

Last October, the government published the first National Infrastructure Plan, outlining its vision for future developments. But according to the CBI, it didn’t go far enough.

“The government is moving in the right direction but several aspects need a push,” said Cridland. “The first infrastructure plan was light on roads but according to our survey, roads were one of the biggest concerns.”

Backers of the survey suggest privatising the construction and upkeep of the UK’s road arteries.

Meanwhile, many London-based companies have highlighted the urgent need for increased rail capacity.

“According to the results journey times aren’t anywhere near as important as the increased capacity on the rail system.” said Richard Threlfall, head of infrastructure, building and construction at KPMG.

“The top of the list of what businesses feel is necessary is action from the enablers of policy,” Threlfall added.

“What businesses are looking for is a plan – a road map to show them where growth will come from in terms of investment. The reports from policymakers are pointing in the right direction but businesses need these translated into action.”

The situation has prompted the CBI to create an Infrastructure Board, comprising CEOs and industry leaders. The board held its first meeting yesterday.

Chairman Mark Elborne, president and CEO of infrastructure, finance and media company GE UK, outlined the board’s goal:

“A significant amount of investment is required from the private sector and there needs to be a credible voice to translate the infrastructure required.

“We will be the voice to help influence the government and help to shape the vision of future infrastructure investment.”

Other key findings in the report include:

·         41 per cent of firms said they were dissatisfied with links to emerging markets.

·         Almost all respondents (95 per cent) were concerned about the rising cost of energy.

·         65 per cent said Britain’s road network had deteriorated in the past five years.

·         46 per cent felt commuter rail had worsened.

·         89 per cent were worried about the security of the UK’s energy supply