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Energy sector now biggest concern as survey finds majority of firms lack faith in infrastructure policy

More than three-quarters of companies do not believe that the UK’s energy infrastructure will improve in the next five years, a new survey has found.

The 2013 infrastructure survey by consultancy KPMG and the CBI found energy had overtaken transport as the infrastructure sector that worried businesses most.

Almost all of the 526 respondents were concerned about the cost of energy and 90 per cent about the security of supply.

There was a 4 percentage point drop in the proportion of businesses that believed the government’s policies would have a positive impact on infrastructure to 35 per cent.

Nearly three-quarters of companies said local roads had deteriorated in the past five years, while almost half said the motorway network had worsened and that commuter rail services had declined.

However, 83 per cent of businesses said the UK’s digital broadband networks had improved in that time and more than three-quarters said it matched or was better than that of other countries.

CBI director-general John Cridland said: “The huge number of businesses concerned about energy supply and costs is alarming.

“The government must get the Energy Bill onto the statute books and bring forward secondary legislation to give potential investors the certainty to deliver the energy infrastructure we need to keep our lights on in the future.”

He added that delays in building key projects led to a loss of faith that politicians would deal with gaps in infrastructure.

He said: “I know that ministers share my enthusiasm for progress, but the government has talked the talk on infrastructure for the last two years with too few signs of action.

“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.

“We can’t afford any further delay. The coalition must show strong leadership and prove that the UK can deliver on a small number of projects over the next 18 months and reach a much-needed consensus on bigger issues such as aviation and roads reform.”

KPMG UK head of infrastructure, building and construction Richard Threlfall said businesses feared that “too many critical investment decisions are being pushed back to beyond the next election”.

He said: “Our businesses are competing each day, every day in the global market, and we need to be investing now in building great infrastructure that is a help rather than a hindrance to our entrepreneurial efforts. We know what good looks like – we need to get on and build it.”

The CBI and KPMG urged the government to introduce tax breaks for the construction of infrastructure schemes in the next autumn statement.

They said the government should do feasibility studies for the road and rail projects laid out in June’s spending review and set out plans for delivering them.

The report added that all political parties should pledge to implement the forthcoming recommendations of the Airports Commission on expansion of the country’s airports.

It also said government and industry should collaborate on a long-term plan for digital infrastructure.

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