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The UK's infrastructure problems

Samira Shackle London
June 27, 2017

The Grenfell Tower fire is just one example of how chronic under-investment in infrastructure has left Britain trailing other leading economies on housing, roads, rail, and airports. Samira Shackle reports from London.

Grenfell Tower in London
Image: Picture alliance/AP Photo/F. Augstein

This month's fire at Grenfell Tower in West London - which killed at least 79 people, with the death toll likely to rise considerably - shocked Britain. Since the fire, attention has turned to the quality of other high-rise buildings.

Read more: Hundreds evacuated from London towers over safety concerns

The disaster served to highlight Britain's housing crisis and the need for concerted action. A spokesman for Prime Minister Theresa May said on Tuesday that all 95 samples of building materials submitted so far for fire-safety testing in the wake of the disaster had failed to meet regulations. The failures greatly magnify fears about safety for thousands of people, with May saying that a "major national investigation" is needed.

Read more: Combustible cladding on buildings similar to Grenfell Tower, says British PM Theresa May

Even before the Grenfell disaster, the issue of social housing - suffering after years of chronic under-investment and a long-term policy of selling off council houses to private owners - was high on the political agenda. All three parties made it a part of their election campaigns. Labour's manifesto promised the largest state house-building initiative for 30 years, the Conservatives included new funding proposals for social housing, and the Liberal Democrats advocated removing the right-to-buy council housing and lifting borrowing caps on local authorities.

The government has not set out what will happen next, but clearly investment is needed. "Now more than ever, political parties must set ideological differences aside and put country before party," said Richard Beresford, chief executive of the National Federation of Builders. "Government will need to focus on putting builders into a better place to build the homes and train the skilled workers the UK needs to succeed, as well as allowing regional economies to prosper."

Infrastructure problems

Robin Hood Gardens in London
Providing adequate social housing is a perennial problem in BritainImage: DW/J. Jitz

Although Britain is one of the largest global economies, it is not only on social housing where its infrastructure is lacking. The World Economic Forum ranks the UK 24th in the world for the quality of infrastructure - roads and railways are overcrowded, water supply has fallen to critical levels in some areas, flood defenses require improvement, and utilities are often far more expensive than in other European countries.

There are several reasons for this. The first is chronic under-investment; a 2014 report by the Royal Society for Arts, Manufactures and Commerce warned that the UK experienced 5 percent lower growth each year from 2000-10 due to this under-investment in infrastructure.

Another factor is that Britain's politicians tend to think in four or five year electoral cycles whereas infrastructure projects require much longer-term frameworks. "In many countries, questions about key infrastructure plans would be outside the partisan political game, and long-term investment decisions would not be blighted by political uncertainty and delay," Diane Coyle, professor of economics at Manchester University, told DW.

Protest at Heathrow airport
A hard Brexit could spell the end of the Heathrow expansion if foreign investors stay awayImage: picture alliance/Photoshot

For many years, discussions over British infrastructure have been defined by high speed rail, the nuclear plant  at Hinkley Point, and the expansion of Heathrow airport with a third runway. These have been mired in problem, delays, and political disagreements.

Read more: UK government backs third runway for Heathrow Airport

Since 2010, successive Conservative-led governments have pursued a program of austerity, meaning deep cuts to public spending. For the most part, capital spending on infrastructure projects was spared from these cuts, as investment in these areas were seen as a means to grow the economy. However, this investment has not always been effectively executed. A damning report by the National Audit Office in January 2016 - found that a third of major government projects due to deliver in the next five years were rated as in doubt or un-achievable unless action was taken to improve delivery.

Uncertain times

Britain is now in the throes of intense political uncertainty, led by a minority government and at the early stages of negotiating an exit from the European Union. Infrastructure is frequently held up as a means by which to shore up the economy - but the uncertainty poses a challenge. The state of public finances cannot be guaranteed and private investors do not see Britain as a safe bet.

"Minority governments are never generally favorable periods for investment markets because of the unpredictability of policy," says Kevin Cammack, analyst as City stockbroker Cenkos Securities. "I think there is a chance given the circumstances surrounding this that the Tories may be less inclined to pursue some of the major projects like HS2 [High-speed rail network linking London, the West Midlands and the North - the ed.] with the vigor that they have been," he told DW.

Passenger passing a high speed train at London's St. Pancras International station
The HS2 rail link may no longer be one of Theresa May's prioritiesImage: picture-alliance/dpa

Read more: Britain courts Chinese investors for high-speed rail line

This week, leaders from the British Chambers of Commerce, the Confederation of British Industry and the Federation of Small Businesses publicly called on politicians to ensure infrastructure projects - in sectors as diverse as energy, transport, water and digital - are not delayed.

And Lord Andrew Adonis, head of the National Infrastructure Commission, warned this week that a hard Brexit would undermine crucial projects. "These decisions on Brexit have a crucial bearing on infrastructure. Business will not invest for the long term if they think Britain is going down the tube. It's as simple as that," he said. "The projects that will be most affected will be those that require immediate private sector investment - starting with Heathrow."