The UK must adopt international standards in order to encourage infrastructure investment as Brexit negotiations continue, according to a new paper published by the Royal Institution of Chartered Surveyors (RICS).
The paper, launched at the Labour Party conference in Brighton, argues for using International Construction Measurement Standards (ICMS) to attract private investment in infrastructure projects.
The private sector is needed as public sector investment is set to fall to 1.4 per cent of GDP by 2020 from 3.2 per cent in 2010, according to the RICS paper.
“The UK is ranked 24th globally for infrastructure, and a steady investment pipeline is critical to ensuring that infrastructure is adequately supported and evolves to meet the needs of 21st century Britain,” said Alan Muse, global director of built environment at RICS.
“This paper clearly shows the benefits of adopting international standards and lays out constructive steps that can be taken to secure investment and ensure the UK remains an attractive option as Brexit negotiations continue.”
New investment is also needed at a time when the construction sector is struggling.
The sector slowed down during the summer, according to economic data such as the IHS Markit UK construction purchasing managers’ index, which slipped to 51.09 in August from 51.9 the previous month and fell below economists’ expectations. Index readings above 50 point to growth, while those below indicate contraction.
The paper calls on the government to be proactive in order to make infrastructure projects less risky to investors, such as by adopting the ICMS.
These standards provides a level of certainty and transparency to investors, according to Mo Rahee, RICS infrastructure policy manager.
“Effective and accurate reporting of capital expenditure can only benefit the construction sector by providing investors with accurate information that inform their investment decision process,” he said.
“Government can also support the sector by identifying projects that will generate long-term revenues and have cross-party support. This will be vital to ensure infrastructure is updated and new projects are delivered.”