Understanding your industry: Infrastructure

The construction and infrastructure industry play a key strategic role in the UK economy. Not only is it a significant employer and driver of economic growth in itself, it is also at the core of the Government’s plans to reinforce the economy by implementing ambitious infrastructure plans set out in the National Infrastructure Pipeline.

As construction and infrastructure hold such an important role in the economy, Brexit and the surrounding uncertainty will mean there are likely to be unavoidable effects on procurement and decisions and UK infrastructure investment. Areas for concern include: A lack of skills due to the EU migrant workers in the sector; higher procurement costs linked to the weak pound and funding -which currently comes from the European Investment Bank.

Although there are clearly challenges ahead, there are other areas of focus:

• UK construction reported biggest fall in new work since 2009
  The industry was hit by the biggest fall in new work in more than 10 years in August as Brexit uncertainty gripped construction firms. New orders declined for a fifth month with commercial construction, including offices and shops, lead the decline as competition for work increased and decision-making by property developers was delayed.
• UK construction is stepping up digital transformation efforts
  A survey of 200 decision-makers in the UK construction industry revealed 2020 will be a key year for the uptake of digital solutions to address areas such as friction within supply chains, risk management and increasing staff productivity. The results show despite 54% admitting the UK construction industry has been slow to adopt digital technologies, there are pockets of optimism with businesses operating across the lifecycle of the built environment realising the benefits of investment in new technology.
• A delay on VAT change is welcomed by construction companies
  The Government’s decision to delay the implementation of potentially damaging VAT changes for construction companies, for 1 year, has been warmly welcomed. Reverse charge VAT was due to come into force from 01 October 2019, but the Government has announced it will delay it until 01 October 2020 after a coalition of construction organisations, wrote to point out the damaging the policy would have on the sector.
• More than half a billion pounds of investment in green technologies announced
  Plans for a cleaner Britain are in full swing as more than half a billion pounds of investment in green technologies has been announced. The Treasury has launched a £400 million fund to increase Britain’s electric vehicle charging infrastructure, with the first £70 million allocated for 3000 charge points – more than doubling the number to 5000. The UK already has one of the largest vehicle charging networks in Europe, and this money will help make it the fastest by installing state-of-the-art technology.
• Bus operators vow to buy only ultra-low or zero-emission vehicles from 2025
  From 2025, UK bus companies have pledged to purchase only ultra-low or zero-emission, calling on the government to adopt a national policy to encourage more individuals to use buses. The Confederation of Passenger Transport wants lower fares for jobseekers and apprentices, smart ticketing and innovative, sustainable solutions for rural areas, where bus services have been hit hard. Although bus travel is still the most popular form of public transport, passenger number have flatlined after declining funding led to fewer services and increased fares.