Infrastructure output per person higher in Scotland than anywhere else in the UK
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Scotland saw 54% more infrastructure output per person than London in 2017 and also came out top in cumulative infrastructure output per person between 1997 and 2017, according to new research.
Commissioned to “shine a light on the delivery of infrastructure projects across the UK since 1997”, the study by public sector procurement specialist Scape Group revealed that despite record investment in infrastructure, the construction supply chain has not seen an equivalent increase in activity.
Scape’s Essential Infrastructure report reveals that UK construction output on infrastructure, which measures the value of construction activity on public and private infrastructure projects, has increased by just £6.4 billion or £70 per person in real terms between 1997 and 2017.
The report analysed publicly available Office for National Statistics (ONS) and Northern Ireland Statistics and Research Agency (NISRA) construction output data, adjusted for inflation, over the past two decades. Construction output is a key measure of UK Gross Domestic Product (GDP) and shows the value of work being undertaken by construction companies.
Scotland has consistently experienced high levels of construction output on infrastructure at £36.09bn since 1997, a huge £6,679 per person and the highest output anywhere in the UK. Since 1997 output has risen from £1.09bn in 1997 to £2.74bn in 2017, but hit an all-time high of £3.73bn in 2015. Per capita Wales comes in third, after Scotland and London, at £5,176.
In London infrastructure output spiked from 2010, closely aligned to investment around the Olympic Games and Crossrail. Output has since dropped down to pre-2010 levels, whilst 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).
Scape has called on the UK government to level the playing field for SMEs to access infrastructure projects across the UK.
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.”
In its research report, Scape Group has made a series of recommendations to improve the efficient decision-making and delivery of UK infrastructure that includes:
Victoria Brambini, managing partner of Scape Procure, added: “It 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 industry’s 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.
“SME engagement across the industry is so important and more steps need to be taken to create an environment where SME involvement is encouraged. Cash retentions are a huge barrier to entry and their removal will enable SMEs to grow by freeing up working capital to be invested in training, skills and technology. The Government is currently consulting on the practice of cash retentions and we will be continuing to advocate against their use within the industry.”
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