SMEs want infrastructure investment ahead of digital

INVESTING in physical rather than digital infrastructure will bring greatest benefit to UK businesses, according to a survey of senior business leaders in the North of England carried out by the Business Growth Fund.

The UK’s most active provider of long-term capital to small and mid-sized businesses says that 69% of respondents claim that improved roads, rail and airport expansion would benefit the businesses they work with, compared to 31% who would prioritise investment in high speed broadband.

Despite this, opinion is divided among Northern respondents on the value of HS2, the planned high speed railway that will link London with Birmingham, Manchester, Liverpool, Leeds and Newcastle.

Half of business leaders in the North believe that HS2 is good for British business, with 40% disagreeing, with the remainder undecided. Nationally, 60% of business leaders agree that the high speed railway will benefit British business.

In contrast to current plans, 60% in the North believe that it would be better to start with the connections from the Northern cities to Birmingham, and then move on to London, compared to the national average of 43%.

In terms of airport expansion, the majority (71%) of Northern business leaders believe that building a third runway at Heathrow is good for British business, although 60% thought increasing capacity, routes and flights at regional airports was equally or more important.

Some 90% of Northern business leaders are against Government re-nationalising the railways, compared to the national average of 83%.

Andy Gregory, regional director North for BGF said: “SMEs are the lifeblood of the economy, bringing much needed jobs and prosperity, but they depend on infrastructure to grow.

“We can see from our latest index that businesses in the North, while united in recognising the importance of investing in physical infrastructure, want this investment to be evenly spread across the UK and bring direct benefits to the companies close to home.

“Once again this index paints a positive picture of the growth climate in the North of England, where ambitious companies continue to thrive, but there are also concerns on the horizon.

“Political and economic instability overseas – in Europe, the Middle East and Asia – has leapfrogged accessing the right skills as one of the top issues holding Northern businesses back from growth, suggesting that the challenges of doing business in an interconnected world are increasingly front of mind for these entrepreneurs.”