A key foundation for growth: improving infrastructure

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As we mentioned in our blog previously, the economy is not much more balanced than it was a decade ago.


Growth is still coming mostly from consumption and a bit of investment with trade continuing to disappoint. Recent history has shown such an imbalance in the components of growth makes the economy less resilient to economic jitters, let alone shocks.
This is why we have been making the case for the next government to achieve greater levels of investment, productivity and trade to deliver better-balanced growth.
Manufacturers believe there are four foundations to deliver this better balanced economy, today I’ll be focusing on the role more reliable and resilient infrastructure can play.

Reliable and resilient infrastructure matters

Two years ago we published Transport for Growth which highlighted the impact of poor transport infrastructure on operating a manufacturing site in the UK. Some of the key stats to emerge were:

  • 59% of manufacturers reported experiencing significant problems with delays in receiving goods from suppliers because of the UK's poor road network - increasing costs and impacting on day to day productivity
  • That figure rises to 66% for the most export intensive manufacturers (those where over 75% of their turnover comes from export sales)

Such delays can be regular occurrences slowing production and potentially leading to a loss of export orders for those in global supply chains.

  • 63% of manufacturers say the quality of the road network has been a barrier to being able to recruit and retain employees, denting investment and the ability to scale up
  • 66% of manufacturers in the East of England said the quality of the road network was a barrier to them investing further in that region

We know from our previous surveys that quality of infrastructure is the 4th most important factor when global manufacturers are looking around for where to make their next investment.

  • 50% of manufacturers say the UK's aviation connectivity is a barrier to building and maintaining customer relationships
  • 43% of export intensive manufacturers say aviation networks have caused them delays in receiving goods from suppliers and a similar percent a delay in sending orders to customers, denting the UK's productivity and trade in the process
  • Manufacturing is a globally focussed sector, with supply chains spanning continents and many of our exports going via air, 40% of the UK's non-EU trade by value is sent via air

Maintaining trade flows through UK airports helps to improve access to and minimise the costs of crucial components, strengthening the UK’s comparative advantage against our international competitors and supporting greater trade.

The next Parliament will be key for delivery in a number of areas if better-balanced growth is to be achieved

The next government must act and:

Put in place a long-term approach to identifying and planning the UK's infrastructure requirements

The current system for identifying our future infrastructure requirements puts the cart before the horse. While the cart will eventually start moving, the effort required in terms of time, money and political capital just to keep the cart… or the infrastructure project on track is wasteful.

This does nothing to support the UK as a place to invest. We recommend establishing a UK Infrastructure Authority as a solution.

Target investment and decision making at strategically important sectors

Roads are the backbone of the economy yet they have been underfunded for decades, the next government should see through the Road Investment Strategy and increase funding for local roads.

Other priorities must be implementing the recommendations of the Airports Commission and renewing the UK’s energy infrastructure to deliver value for consumers and ensure security of supply for industry.

Put funding for local and strategic road networks on a stable footing

The levels of spending on the road network in the next Parliament will be unprecedented by historic standards. We must not return to the unpredictable and inadequate funding settlements of the past.

Alternative funding arrangements which lock in and guarantee the required levels of road funding should be pursued for beyond 2020.

With further fiscal consolidation and the ‘quick win’ decisions already taken, the next Government will have to take some major decisions on the long term trajectory of infrastructure in the UK. We can’t afford a Parliament of prevarication on infrastructure.


Head of Business Environment Policy

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