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09/07/2018

UK Infrastructure Output Rises By £6.4bn Since 1997 - Scape

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New figures have revealed how the UK's infrastructure output has increased by £6.4 billion over the last 20 years.

Research from Scape Group has highlighted that despite record investment in infrastructure, the industry supply chain has not seen an equivalent increase in activity.

The Essential Infrastructure report states that with a £6.4bn increase between 1997 and 2017, this works out to just £70 per person in real terms.

In England, London has seen the most construction output on infrastructure projects across the UK in the past two decades, with a total value of £54.14bn. However when analysing the data relative to the population of each region, the North East is the most active region relative to its size.

Per person in 2017, the North East experienced 40% more construction output on infrastructure projects than London, whilst the North West saw 27% more – suggesting that these regions are catching up with the capital and ending the traditional North-South divide.

Infrastructure also spiked in London from 2010, closely aligned to investment around the Olympic Games and Crossrail. While output has since dropped down to pre-2010 levels, other regions are experiencing increased per capita output. For the last three years infrastructure output per person has been higher in the North East of England (£1,156) and North West (£901) than in London (£864) and the South East (£799).

Elsewhere, the West Midlands has had the lowest infrastructure output per person since 2010, with just £1.1bn in output last year.

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Scotland has consistently experienced high levels of construction output on infrastructure, with £36.09bn since 1997, working out to £6,678 per person and the highest output anywhere in the UK.

To improve the efficient decision-making and delivery of UK infrastructure, Scape Group has made a number of recommendations in its report;

• A removal of retentions throughout the construction industry and a commitment from clients to ensure payments to Tier 1 contractors within 14 days, and for contractors to pay Tier 2 suppliers within 19 days and Tier 3 suppliers within 23 days, improving upon the current requirements of the Construction Supply Chain Payment Charter

• A commitment to driving forward the devolution agenda to support the joined up delivery of infrastructure

• A widening of the National Infrastructure Commission's remit to prevent the 'politicisation' of infrastructure decisions

• A commitment to ensuring that all public sector contracts valued at £10m or more, produce at least 20 per cent of that figure in Social Value to the community

Mark Robinson, Scape Group Chief Executive, said: "This data clearly illustrates that the north-south divide in England, starts to disappear when construction output is calculated per person. To encourage the increased delivery of infrastructure in areas where output has been low in recent years we need to continue to drive forward the devolution agenda. The metro mayors have a vital role to play but at the same time we need to encourage local authorities to work together to deliver infrastructure that meets their common ambitions and aspirations.

"We recently passed the 10 month countdown on Brexit negotiations and it is more vital than ever that Great Britain is able to demonstrate its economic strength, reverse the negative swing in Foreign Direct Investment and prove that, we have an infrastructure plan in place to keep UK Plc in business."

Victoria Brambini, Managing Partner of Scape Procure, said: "is vital that the industry and politicians recognise that infrastructure projects do not operate in silos. The positive impact for wider society during the planning, delivery and end-use should not be under-estimated.

"Infrastructure projects are a catalyst for social value, directly and indirectly creating opportunities for the local community. Employment, training and apprenticeship opportunities are essential, especially as we seek to address the industries skill shortage now and beyond Brexit.

"By introducing a minimum commitment to social value on contracts over £10m we can ensure that there is a consistent approach to social value creation and the benefits are truly felt within local communities."

To download the Essential Infrastructure report, visit here.

(LM)

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