- Majority of businesses have found they are affected by government decision-making on infrastructure
- New FSB research into how businesses are affected by infrastructure and what Welsh and UK Governments can to do better deliver for Wales’ SMEs
- New approach to cross-party consensus needed to generate 30-year plan for Welsh Infrastructure
FSB Wales’ new report Are we there yet? A roadmap to better infrastructure in Wales reviews the decision-making that surrounds several infrastructure projects in recent years. These include the high-profile stalling and cancellation of the Swansea Bay Tidal Lagoon and rail electrification to Swansea, as well as the First Minister’s decision not to proceed with the ‘black route’ of the M4 relief road and the issues facing Wylfa Newydd power station. These have dominated headlines in recent years, but the impact of infrastructure upon smaller firms in the medium to long-term – both when projects do and do not happen – has been less widely discussed.
This new research from FSB Wales has found that 63% of Welsh businesses have been affected by infrastructure including roads, public transport, digital infrastructure and utilities. In terms of transport, overwhelmingly, the use of a car or van was very important to 89% of businesses, irrespective of where they were based in Wales.
Following an investigation and survey of 348 businesses in Wales, FSB Wales has identified that the top issues caused by infrastructure were increased costs, reduced profits and fewer customers.
The establishment of new organisations have also altered the infrastructure landscape in recent years. Welsh Government instituted the National Infrastructure Commission for Wales (NCIW) in 2018, and tasked it with ‘working across the regions to identify Wales’ future infrastructure needs for the next 5-30 years’. FSB has concerns that the remit of the institution remains ambiguous, and businesses have yet to see how it will inform approaches to large, headline-grabbing projects, as well as the smaller infrastructure issues that affect smaller firms on a day-to-day basis.
FSB’s work has pointed to geographical issues in terms of where infrastructure is best funded. In terms of transport infrastructure across Wales, as well as a firms’ ability to access reliable broadband and mobile phone signal across the country, FSB’s report suggests regional variations. This has led to businesses in regions of Wales feeling not well served by infrastructure. FSB has recommended that Welsh Government ensure that every region of Wales is able to benefit from infrastructure investment.
Based on the importance of local infrastructure to SMEs, FSB has called for funds that recognise this, recommending a minimum of £100 million which would be given to regional authorities to help develop local infrastructure priorities.
Responsibility for infrastructure has complex ownership across local, Welsh and UK Governments. FSB Wales has argued in this new report that ensuring a strategic approach that promotes efficiency, connectivity and minimises duplication of effort or at worst, inaction. A new approach, fit for the 21st century, will require better, more demonstrable collaboration from politicians in order to deliver for the economy.
FSB asserts that these issues, as well as the changing institutional landscape surrounding infrastructure, mean that the business voice must be heard by politicians and decision-makers, ahead of NCIW’s first report later this year.
Commenting on the report, Ben Francis, FSB Wales Policy Chair, said:
“The vast majority of businesses in Wales are smaller firms, and so infrastructure planning and spend must deliver for these businesses in order to ensure that our economy can thrive and be as productive as possible.
“Smaller firms’ infrastructure needs range from the smaller projects to those larger projects that have often preoccupied the debate on infrastructure, although unfortunately rarely has much else materialised.”
On the role of political consensus and decision-making:
“This report makes clear that short-term political thinking and lack of engagement has led to failings on large-scale infrastructure projects for Wales.
“We’ve issued a bold call to politicians in all elected roles to commit to cross-party working and agreement in order to ensure that these mistakes are not made again in the future. Real progress can be made, and businesses across Wales can be better served only by elected representatives working more collaboratively on delivering infrastructure needs.”
On geographical issues:
“There is a clearly perceived geographical bias in terms of how infrastructure spend is managed.
“It is just not good enough that we still regularly hear our members refer to issues such as the ‘neglected interior’ of Wales; whereby infrastructure spend is concentrated on South and North Wales, with mid-Wales being forgotten in this equation. We know that infrastructure – both physical and digital – is just not as good in some areas as others and this is unacceptable. This is holding those communities back, and holding Wales back.
“We’ve called for NICW to be mindful of the geographical variances in Wales, and to commit to ensuring that every business in Wales can benefit from infrastructure spending.
“While disappointed with the decision-making process surrounding it, FSB Wales agrees that the M4 Relief Road ‘black route’ would have had an unsustainable impact on the capital budget elsewhere had it gone ahead. However, despite Welsh Government’s decision on the M4, businesses are still no clearer as to how infrastructure elsewhere in Wales will benefit from this decision.”
On the National Infrastructure Commission for Wales (NCIW):
“NCIW is and should be an opportunity for a strategic overview of Wales’ infrastructure in the coming years. However, it is a worrying statement of the fledgling institution that Welsh Government did not task them with investigating solutions to the problem of congestion around Newport after deciding not to proceed with the M4 ‘black route’. It is incongruous that an entirely new expert commission was appointed to investigate this.
“This is a significant missed opportunity, which would have been a good early test of the ability of NCIW to act in a meaningful and effective way for business and the economy.
“As a result, it is incredibly important that NCIW’s role and remit is clarified and that this is properly communicated to the public. It is vital that NCIW waste no time in building the confidence of SMEs in its abilities to deliver.”
In summary:
“Infrastructure is particularly important to smaller firms in order to give them a level playing field. Smaller firms are more likely to be embedded within their communities and are therefore less likely (or able) to relocate.
“Changing political priorities and short-term thinking are paralysing our ability to generate a long-term vision. We want to see a commitment to political consensus as well as engagement of the National Infrastructure Commission in generating a 30-year vision on infrastructure to which businesses can subscribe as developing our economy”
“At a strategic level, infrastructure underpins how we grow the economy. This can drive local economies and communities, increase investment in our regional economies and increase employment. If we are serious about moving the Welsh economy forward we must tackle these issues.”