Firms claim they are held back by lack of infrastructure action

 
Tim Wallace
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AIN'S transport network, energy system and water infrastructure are all likely to stagnate rather than improve, a new business survey shows today, despite the government's claims that it wants to boost the sector.

Investment in the UK may be hit as a result - the study from the CBI and KPMG shows 61 per cent of firms believe the UK's infrastructure is worse than that of other EU countries.

Almost three-quarters of firms said they do not expect any improvement in transport infrastructure in the next five years while two-thirds said energy and water infrastructure is unlikely to get better, because of uncertainty over the policy framework.

"Whether it's aviation capacity, electricity markets or funding our roads, the government needs to take some big decisions which will have a major, lasting impact on inward investment and businesses' ability to compete overseas," said CBI leader John Cridland.

The study showed 97 per cent of firms believe the UK's planning system is a barrier to delivering new infrastructure, with firms evenly split over whether or not the government's reforms will make a difference.

And firms are also pushing for more airport capacity, a major point of contention between politicians - 54 per cent of firms who deem direct flights to China crucial say they are not satisfied with current availability.

However, the Treasury insists the government is committed to the UK's infrastructure needs, with the UK Guarantee Scheme aiming to give a £40bn boost to key projects.

In addition it has spent £1bn on schemes to ease road congestion, £170m on local transport projects and £100m on creating 10 "superconnected" cities.