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Regions playing catch-up damages UK prosperity

We’ve all seen media coverage devoted to regional divides in the UK, from job creation to house prices. 

But another split has developed which could affect the prospects for sustainable UK-wide economic development unless concerted action is taken.

According to our Infrastructure Outlook Report, conducted with Ipsos Mori, business leaders in the UK construction industry see a clear disparity between London and the South-east and the rest of the UK in terms of infrastructure investment.

Seventy-two per cent of those surveyed for the report first mention either London (51 per cent) or the South-east (21 per cent) as the regions they think will see the most spending on infrastructure projects in 2016.

This compares with very few who think other regions will spend more. Only the North-west registers as high as 5 per cent – and others even less.

There’s a similar story when asked which regions will benefit the most from spending, with London and the South-east again way out in front.

Falling behind

No surprises, perhaps, in these findings. They show that, in relative terms, infrastructure in the regions is falling behind as the capital and South-east attract the greatest investment and development. This matters if we are to have a broad-based, successful economy in which everyone prospers.

Our report focused on business opinion, but the issue is not only a matter of perception but hard fact. Analysis of the government’s National Infrastructure Pipeline by the Sheffield Political Economy Research Institute shows planned infrastructure investment in London totals more than £45bn – £5,305 for every person living in London.

“There is far greater consensus that the UK’s smaller, regional infrastructure projects are just as critical and require more attention”

This compares with a UK average of £3,192 per person. Every other English region has planned public infrastructure investment significantly below not just London, but the UK average.

Investment will be £1,946 per head in the North-west, just £851 per head in Yorkshire and Humberside and only £414 per head in the North-east – the lowest of all.

How can we avoid creating an even greater imbalance? There does seem to be renewed impetus for change, with flagship schemes helping to share infrastructure investment across the country.

High Speed 2 is a critical part of Birmingham’s recovery plan; the Northern Powerhouse is a central plank of the government’s effort to help prosperous cities in the North realise their full potential; and the £15bn roads investment strategy will improve connectivity across the UK.

More needs to be done to build on this momentum and drive regional activity.

More than just big ticket

According to the 300 business leaders interviewed by Ipsos Mori for our report, there is strong support for investment in local road and rail projects beyond the big tickets items such as HS2 and airport expansion.

When asked to rate out of 10 how much they supported particular projects – 10 being high and 1 being low – maintaining the local road network scores 8.4 and upgrading the strategic road network out of London 7.9. In contrast, HS2 scores 5.5 and a new runway at either Heathrow or Gatwick come in at just 5.2 and 5.0 respectively.

Just as HS2 and new airport runways are proving controversial across the country, so too are they dividing opinion in the infrastructure sector. There is far greater consensus that the UK’s smaller, regional infrastructure projects are just as critical and require more attention.

There aren’t many in the infrastructure world who would disagree that the UK can be better connected, integrated and efficient. Delivering major projects across all our regions is vital and this has to be a continued focus.

In the race to improve our infrastructure, all the UK’s regions should be coming first.

Jeremy Greenwood is managing director of Tarmac’s Readymix business

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