UK infrastructure ambitions may not be sinking, but they are treading water: Autumn Statement, Thursday 17 November 2022

Rohan Malik, EY UK&I Government and Infrastructure Leader, comments:

“Delivered against a backdrop of challenging long term economic conditions, today’s Autumn Statement will reassure businesses that the Chancellor is committed to maintaining stability. Business ultimately works best when policy is clear, certain and telegraphed in advance, as this allows for forward planning. The Chancellor has laid out his plan to balance public finances and while the immediate future will be challenging, the outlook isn’t as downbeat as some might think. The EY ITEM Club predicts that inflation has likely peaked, which supports this view. While it may be too soon to spot the green shoots yet, a period of stability may help sow the seeds of economic recovery.

“It was encouraging to hear that capital expenditure will not face sweeping cuts, although the announced freeze in public investment from 2025 may still represent cuts in real terms. This will put pressure on the UK’s already-delayed pipeline of major infrastructure projects, and risks missing an opportunity for economic growth, at a time when markets are readying for recession. The Government’s next steps will be crucial in deciding whether opportunities can be seized and whether the levelling up strategy is realised following years of well-intentioned policy announcements. UK infrastructure ambitions may not be sinking, but they are treading water.

“Private sector capital is ready and waiting to be mobilised to fill the gaps left by cuts and deliver projects that will drive jobs, skills and growth in the regions and industries that need them most. However, private institutional investors need clarity on what our national infrastructure priorities are, the projects Government wants to pursue, and how it plans to finance them. The Government has acted to balance public finances, and now it must match that with an explicit pathway towards infrastructure partnerships that empowers business to step in to carry the load.”