CBI Calls for Government Support into Infrastructure

Posted on 17 September, 2013 by Kirsten Kennedy

With the construction industry going from strength to strength in the UK, businesses are being given opportunities to expand and improve their premises on a scale not seen since before the recession hit in 2008. However, in a survey conducted by the Confederation of British Industry, it was found that a number of companies in the UK do not believe that the government is fully committed to backing big building projects.

The survey, undertaken by the CBI in conjunction with accountancy firm KPMG, revealed that only 35 per cent of the 526 respondents supported the government’s current strategy in relation to essential infrastructure. Regional transport links proved to be one of the largest sticking points for businesses, with 73 per cent of participants expressing concern regarding the “deterioration” of road networks used by their employees.

Furthermore, 95 per cent of firms believed that rising energy costs could prove detrimental to their business costs, while 90 per cent voiced concern regarding supply – something the National Grid and government are presently addressing in a bid to ensure consumers do not find themselves without power in the coming years.

All in all, these doubts have led to widespread insecurity regarding the government’s capability to deliver sustainable infrastructure growth. In fact, 65 per cent of businesses do not think that the government’s current aims would have an effect and could even make the situation worse in the long run.

Director General of the CBI, John Cridland, believes that the government have an “enthusiasm for progress” but claims they have “talked the talk on infrastructure for the last two years with too few signs of action.”

He continues; “The faltering speed of delivery on infrastructure creates a worrying sense that politicians lack the political will to tackle some of the major issues head-on.”

While the government responded to the claims by insisting infrastructure remains a top priority, the major concern is that the lack of faith shown by businesses in the survey will hinder growth and prolong the path to economic recovery. It is especially important to address this issue soon, as a separate study conducted by the Federation of Small Businesses found its members are now contributing significantly to employment growth for the first time in at least three years, especially in sectors such as financial and business services and technology.

John Allan, chairman of the FSB, said; “Optimism, growth and confidence can be used to summarise this quarter’s findings.

“Small firms are clearly helping the economy gain momentum compared to the same point last year.”

In order to keep up momentum and positive growth, the CBI has laid out a five point plan designed to help the government boost construction over the next 18 months. This would involve an increase in capital allowance for major construction works, allowing more firms to take on large scale projects.

With the UK economy looking more positive than it has for some time, it is imperative that firms are given the support required to grow and thrive. However, with only seven of the 576 projects in the government’s infrastructure pipeline having been completed so far, urgent action is required to ensure businesses have both the facilities and the transportation required to expand.

Do you think the government should be addressing issues such as energy and poor road links as a priority, or is economic growth still the key issue in the UK?




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