Infrastructure should play a role in delivering £23.2 billion for East of England in higher productivity gains
Shaping Regional Infrastructure, a report drawing on conversations with members of the UK’s largest business group, Unlocking Regional Growth and the 2016 CBI/AECOM Infrastructure Survey, demonstrates the pressing need felt by businesses to enhance their infrastructure and connectivity across the country.
Improving the links between regions will give firms access to a broader labour market pool and better connections to supply chains. Moreover, with businesses across the country wanting a long term aviation strategy that makes the best use of regional airports, better links to these are vital to connecting firms with new and existing international markets to which to export – particularly important post-Brexit.
CBI analysis shows that if the East of England’s productivity grew at the same pace as the region’s best performing area did between 2004 and 2014, the gain to its economy could be £23.2 billion by 20241. And improvements to infrastructure could play an important role in this. With 94% of firms also seeing technology as a crucial driver of increased productivity, its better and greater use will improve infrastructure delivery.
In the East of England, where 37% of firms are dissatisfied with the state of their infrastructure, and 34% believe further devolution would improve it, key priorities include:
- Enhanced rail connections with London and the South East
- A coherent agenda and narrative for infrastructure planning and delivery
- Improved access to international markets – with easier and faster connections to Stansted Airport
Richard Tunnicliffe, CBI East of England Director, said: “England’s infrastructure is the arteries and veins without which the country its economy and businesses function. But with a third of East of England firms dissatisfied with the state of our region’s roads, rails and ports, it’s vital the pace of taking action and delivering improvements is stepped up.
“Infrastructure is a key driver of productivity. By making it easier for staff to get to work and by better connecting companies to their customers, markets overseas and supply chains, we could do a great deal to lift England’s productivity.
“Moreover, ramping up trade with international partners – old, new and in all corners of the world – will be crucial to making a success of Brexit. This makes it doubly important to better connect firms to these markets, particularly through the Government’s commitment to a long-term aviation strategy and giving our regional airports a new lease of life.
“A strategic plan for delivery, tailored for each region, will also be needed for firms to feel devolution will truly make a difference when it comes to infrastructure.”
Firms want to see a more joined up approach to delivery across the different types of infrastructure, from housing to energy to transport, as well as strategic regional plans with a clear idea of where decisions will be made.
1How did we calculate the “size of the prize” figure?
To give an illustration of the potential gains from raising productivity across the regions, the CBI has calculated what the economic impact could be by 2024 if each local area in England could improve at the same rate as the top performer in their respective region or nation.
First, for each region we identified which of the local areas (NUTS3) have increased their nominal GVA per hour the most between 2004 and 2014. This identified the 11 'star performers' across England’s regions.
Next, we established a baseline scenario, under which productivity for each local area continues to grow over the ten years to 2024 at the same pace that it did over the ten years to 2014.
Under the alternative ‘reach for the stars’ scenario, we tried to gauge what would happen over the next decade if each local area could match the performance of the star in their respective region. In other words, if every local area could emulate the success stories in their region, what would be the gains in productivity be at the England and regional level?
The difference between the two scenarios is the respective productivity number for each region – or £175 billion for England as a whole.
Notes
The CBI and Irwin Mitchell have partnered to produce an interactive map to help visualise the strengths and opportunities for each area of the UK. Click here to see the scorecards for each region and Devolved Nation in the UK.
Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly 7 million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.
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