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CBI director warns that key regional network links could remain 'on hold'

By Western Morning News  |  Posted: December 05, 2013

By Gordon Richardson

Rhian Kelly, the CBI's director for business environment

Rhian Kelly, the CBI's director for business environment

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The CBI's director for business environment has said that workloads and confidence are growing in the South West's construction sector but businesses remain frustrated by a lack of investment in essential transport infrastructure.

On a visit to Exeter hosted by law firm Stephens Scown, Rhian Kelly told businesses how the CBI was adding its voice to calls upon the Government to improve the region's transport links.

She said: "Our annual infrastructure survey shows South West businesses are the most pessimistic in the country about the state of the motorways and local roads, and that 35% felt that inter-city rail services had deteriorated in the last five years.

"We've been arguing for upgrading the A303 for a long time. One of the challenges for our members in this region is there's a lot of rhetoric but nothing seems to be happening.

"The problem is the Government has announced it on a long list of projects, but then you have to do a feasibility study which takes time, then there might be an election and the truth is these projects may still be on hold in three or four years' time.

"We need Government to move quicker. This point around delivery comes up time and time again in terms of infrastructure."

The Heart of the South West LEP has backed calls that have also come from the Royal Institution of Chartered Surveyors, for the Government to prioritise infrastructure projects that will produce the biggest economic benefit, rather than those that happen to be "next in queue."

Looking at the construction sector, Ms Kelly said that the industry's burgeoning national recovery saw around £5.7 billion of new contracts awarded in October across the UK.

"The South West took eight per cent of these, so the bounce isn't just a London and South East pick-up," she said.

"We're still well below pre-recession levels, so there's a long way to go. But things are looking up, people are feeling more positive and there's no sense that this is a one-off and we will be back into a dip.

"With construction in particular, we see it as slow and steady rather than rising sharply."

In terms of regional infrastructure activity, Ms Kelly welcomed progress on developments in the Exeter and East Devon Growth Point, but stressed the need for "more innovative public-private partnerships" in future to finance regeneration schemes in a world of reduced grant funding.

While expressing cautious optimism about the economic recovery, she added that concerns remained over the strength of its consumer-led thrust, compared to business investment and export-leads.

Moving on to rising energy bills, she said: "All the feedback we've had is that whilst from a business perspective we don't think price freezes are the right policy solution, what Ed Miliband has done is open up a conversation about costs and that in itself is quite helpful."

Whilst welcoming a Government compensation package to help the UK's most energy intensive industries remain competitive, she argued such measures needed to be agreed at a European level.

Last month, the CBI published its business vision for a 'reformed EU', after conducting an in-depth study of the UK's global future and concluded that the UK must stay within it to maximise opportunities for global trade.

Ms Kelly said: "Energy and climate change is one example where it's better to be working together than independently, and we have more clout internationally if we're part of the EU than if we're not.

"More broadly, the market is so significant we wouldn't want to not be part of it, and the market is our springboard into international markets and therefore it makes absolute sense to be part of the EU and then use the EU to access emerging economies."

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