What progress has the Government made in improving transport infrastructure in the last year?

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A year ago we published Transport for Growth. Based on a survey of our members it gave an overview of how manufacturers view the various transport networks in the UK and made recommendations on how these networks could be improved to support the investment and export intentions of manufacturers. In a recent post we looked at the importance of infrastructure to UK manufacturing.

We've written before about the key survey findings. This post provides an update – what progress has the Government made in improving transport for manufacturers in the last year?

Assessing future infrastructure need

In Transport for Growth we recommended the establishment of an independent infrastructure body, tasked with looking ahead at long term infrastructure needs and setting out the framework for assessing projects. The Government remains lukewarm to such an idea citing the National Infrastructure Plan as accomplishing the same goal, yet the NIP is much more a short term delivery document than an extensive look ahead.

The Armitt Review recommended creating a National Infrastructure Commission to assist in this, but we believe these proposals need to evolve further to allow decisions made to stand the test of time. In the coming months we plan to outline in more detail our own vision for a UK Infrastructure Authority.

Sustainable funding for the road network

Although there are plans for a ‘three-fold increase' in funding of the strategic road network the investment priorities between road and rail are still skewed toward the latter.

This is despite the significant importance of the road network as the artery which holds the rest of the transport network together and the funding backlog which continues to compound challenges.

Yesterday saw the introduction of the HGV road user levy, which aims to ensure that foreign hauliers make some contribution to the maintenance of the UK road network. However, the proposed Highways Agency reforms retain funding from the public purse. Our survey highlighted some support for road user charging if improvements in the existing network were made. Of course, key issues such as ensuring this is revenue neutral, would have to be tackled.

Addressing airport capacity constraints

We argued that the work of the Airports Commission should be accelerated to deliver their recommendation in advance of the election so parties can seek a mandate, their interim proposals (Heathrow, Gatwick or a more detailed Thames Estuary airport) have narrowed the list down to a concrete set of proposals from which politicians will no doubt set out their preferences in advance of the election.

By autumn 2014 the Airports Commission will also make clear whether or not the Thames Estuary proposal is a flyer. We don't think it is and have already set out our preference for Heathrow expansion if the environmental impacts are managed, given its dominance as a global freight hub.

So is it job done?

Significant progress has been made in a relatively short amount of time and the Government should be applauded for this, but it is far from mission accomplished.

A year from now we will be on the cusp of a significant boost in infrastructure spending. In total, across the five years from 2015/16, a total of £67bn has been earmarked to be spent by central government on transport, the profile is shown in the chart below.

Such a significant boost in spending could result in supply side constraints and potential inflation a risk we have highlighted before.

Regardless of who forms the next Government another spending review will need to take place, in theory some of the announced capital investment could be scaled back, just as it was in 2010.

Taking all this together, while progress has been made in the last year in addressing some of the challenges we identified with our transport networks, the medium term prospect over the next Parliament still has some uncertainty and the long term strategy beyond 2020 barely exists.


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