Balfour Beatty outlines post-Brexit infrastructure challenges

Balfour Beatty infrastructure 2050Major infrastructure projects in the UK are now under threat as construction firms are increasingly faced with limited access to labour and finance, a new paper from Balfour Beatty has warned.

With an “anticipated infrastructure investment of £411 billion in 564 projects and programmes from 2015/16 onwards”, Britain’s biggest contractor said there is an increased need for companies to adapt within several key areas and ensure there will be minimal impact to the continuing development of the UK’s infrastructure, tackling the shortage of skilled workers, alongside uncertainties gained from the recent Brexit vote.

Through focusing on six key areas: roads, rail, aviation, energy, nuclear decommissioning and flooding, the paper Infrastructure 2050: Future Infrastructure Need provides information to ensure the UK’s infrastructure continues to advance, developing a skilled workforce that will provide continuity and “maintain a more technically advanced and data rich infrastructure”.

Detailing its concerns regarding major infrastructure projects, Balfour Beatty said “uncertainty around the free movement of labour… may increase costs where demand for labour outstrips supply, with the subsequent risk of project delays”.

It added: “This will be particularly relevant for mega projects such as HS2 and the nuclear new build programme.

“In our view, this requires an early and integrated policy response to both retain the skills of those who have migrated here and to ensure that the UK remains an attractive place for talented people to move to. The country must maintain its skills base.”

The document warns that private investment is likely to be slow while the UK’s exit from the EU is negotiated.

It added: “Longer term, the impact on private investment in infrastructure projects is unclear, but some investors are likely to postpone decisions to make investments until the UK-EU relationship is renegotiated. Given the long lead times for major infrastructure projects, this risks delaying some of the key planned projects.”

A positive outcome noted in the report is the potential opportunity to create a diverse post-Brexit UK economy.

Infrastructure 2050 said: “This could be an opportunity for the much talked about diversification of the economy away from financial services and back towards industries such as engineering, construction and manufacturing, as the UK may no longer be bound by single market rules which restrict a more active industrial policy. This, in turn, would support the rebalancing of the economy more evenly across the regions.”

There are also a number of recommendations on how the UK can make the transition to autonomous vehicles, flood resistant infrastructure, a decarbonised energy market and develop the highly skilled workforce required to build and maintain the UK’s infrastructure.

Balfour Beatty called for a far-reaching vision being set out for the national transport network which should take into account likely developments in all forms of transport and consider rail as part of a wider solution. The vision should encompass future rail infrastructure projects such as HS3, HS Scotland, HS Southwest, the reinstatement of the HS2 link and Heathrow spur, another Channel Tunnel, a new East Coast line, Crossrail 3 and 4.

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