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Londoners say their infrastructure lags behind expectations of a world city

Londoners say their infrastructure lags behind expectations of a world city

EY

5 min read Partner content

According to a new poll of Londoners, business leaders and councillors in the capital, London’s infrastructure lags far behind expectations for a world city, which according to new thought leadership panel London Tomorrow, could be affecting the capital’s international competitiveness. 

The new research by ComRes for London Chamber of Commerce and Industry lists housing, transport and digital connectivity as the top three areas thought to be furthest behind expectations across all three audiences, with businesses also particularly negative about airport capacity.

On all measures tested, a large proportion (from 24% - 87%) of the three audiences asked felt that London’s infrastructure did not meet their expectations for a major world city. More than 1,600 London business leaders, councillors and Londoners were polled on:

  • Sufficient availability of homes: 87% of London councillors; 74% of London business leaders; 70% of Londoners think the capital performs worse than their expectations for a major global city

  • Transport infrastructure: 46% of councillors; 37 of business leaders; 32% of Londoners think existing infrastructure lags behind expectations of a world city

  • Digital connectivity: 45% of councillors; 40% of business leaders; 28% of Londoners feel the capital’s digital connectivity is behind their expectations

  • Airport capacity: 39% of councillors; 37% of businesses; 24% of Londoners said that capacity did not match their expectations for a major world city

  • Provision of schools and colleges: 39% of councillors; 30% of business leaders; 27% of Londoners expected London to have a higher provision as a major global city

The research from London Tomorrow, a thought leadership panel organised by London Chamber of Commerce and Industry in association with EY London and supported by London City Airport, looked at the infrastructure investment needed in the capital and how this could be funded and delivered.

According to the Mayor’s 2014 London Infrastructure Plan, £1.3 trillion of investment is required to deliver the infrastructure projects planned up to 2050. There is currently a funding deficit of more than £130 billion.

Government finances will continue to be squeezed throughout the new parliament and beyond, so to drastically improve London’s infrastructure – from roads, tube lines and bridges; to digital connections; schools and homes – large amounts of private investment will be needed. 66% of all infrastructure investment in the UK up to 2020 is expected to come from purely private sources, with 14% expected to be public-private in partnership; and only 20% solely provided by the public sector.*

When asked, councillors, businesses and Londoners all agreed that private investment was required in some degree to fund most of the areas of infrastructure tested (new affordable housing; improving utilities; schools and colleges; broadband coverage and mobile reception; transport infrastructure projects).

However, business leaders polled by London Tomorrow cited a number of barriers to investment in and delivery of major infrastructure projects. Costs of the projects (62%); limited appetite from the treasury to provide grants (47%) and complicated planning restrictions (45%) were cited by business leaders as the main barriers to delivering major infrastructure projects. 45% of London business leaders also said that greater clarity around potential political decision-making on major projects would encourage greater private investment in such schemes.

One example of large-scale private investment in a critical piece of infrastructure is the development of London City Airport.

Commenting on the poll results, Patrick Burrows, Chief Financial Officer of London City Airport said on the issue of airport expansion in London, a crucial area of infrastructure investment:

“The government must make a decision to allow an increase in airport capacity or the London economy will suffer, however we recognise that any new runway solution is unlikely to be implemented until the late 2020s and believe that better use of existing airport capacity must be made in the interim period. LCY already has permission to increase flight movements – we simply require a permission to expand the airport’s infrastructure in order to inject much-needed capacity into the airport’s system while the Airports Commission’s recommendations are being implemented. Extra capacity at LCY could be achieved within 18 months.”

Colin Stanbridge, Chief Executive of London Chamber of Commerce & Industry and Chair of the London Tomorrow panel said:

“Government and the Mayor are continually trying to attract private investment in the capital, but there is little point if those very institutions are then responsible for blocking the delivery of key projects.

“Our research has found that an uncertain political environment, planning red tape and the costs associated with delivery all serve to stop the private sector investing in and delivering the critical infrastructure improvements our city needs to remain internationally competitive.

“To really improve the infrastructure of our city – not just roads and tubes, but schools, homes and digital connectivity as well – Government and the Mayor must make it easier for private investors to put their money into these projects. Investment can’t just be attracted and then ignored, or even obstructed, but must be actively channelled.”

Manish Gupta, Partner with EY’s Transport & Infrastructure practice said:

“London is a truly world-class magnet for attracting foreign direct investment (FDI), with the city remaining the single most important location for FDI in the UK and across Europe, according to EY’s 2015 UK Attractiveness Survey”.

“To maintain London’s position as a world class city – the Government needs to continually focus on high quality infrastructure, not only for today, but plan for next 20-30 years. Developments in various parts of London including Stratford, Canary Wharf, St Pancras, Battersea and areas on the Crossrail route clearly demonstrate the role of infrastructure developments. The focus needs to be on the Government’s commitment to continue investing in London infrastructure to support and sustain London’s pre-eminent position in the global economy.” 

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