UK manufacturers say national road infrastructure has deteriorated in the last decade.
But strong investment in digital infrastructure has led to a boost in digital adoption, delivering increased profitability and growth for 65% of businesses
Key findings:
- 54% of manufacturers say national road infrastructure has deteriorated in the last ten years
- Three quarters of manufacturers say road networks are important to supply chains and over half disagreed with the scrapping of the northern leg of HS2
- 64% of companies report that digital infrastructure has improved over the last decade
- This vastly improved digital connectivity has enabled nearly half of Britain’s manufacturers (44%) to invest in digital technologies and boost growth and new jobs
- 71% of companies say better quality infrastructure increases productivity
Aversion to risk and long payback times have resulted in successive Governments failing to invest sufficiently in Britain’s infrastructure. Our 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.