October 22, 2021

Ailing UK infrastructure forces a quarter of offices and facilities to close or relocate in the UK

New research by leading audit, tax and consulting firm RSM UK has revealed that ailing UK infrastructure has led to almost a quarter of middle market businesses closing offices and facilities or relocating in the past three years. 

RSM’s The Real Economy Report revealed that 22% of business leaders have closed or relocated an office or facility in the last three years due to current or anticipated UK infrastructure limitations within the area where they were based. In addition, 63% said UK infrastructure was hampering the growth of their business. 

Almost half (43%) said prioritising investment in 5G networks and rural broadband would bring the most significant benefit to their business, followed by network security (41%) and the UK road network (36%); which could stem the flow of businesses consolidating, closing or relocating in certain areas. However, nearly three-quarters (74%) of businesses believe that there will be meaningful action from Government in the next three years. Large-scale schemes such as Cross Rail, HS2 and New Town deals were all seen as having the most significant impact on regional economies – helping to level up areas outside of London and the South-East.

Kelly Boorman, partner and construction industry analyst at RSM UK, comments: “The UK has historically experienced mixed progress with infrastructure developments and the impact of this is evident if you look geographically across the UK. It is not necessarily due to a lack of investment appetite in less developed areas, but the concentration of funding has generally gone to a handful of larger projects predominately in the South. However, the acute impact of this is being felt by business leaders having to make tough decisions to close, consolidate or relocate due to ailing or ageing infrastructure.

“The pre-pandemic plans from Government to ‘level-up’ through infrastructure investment should be re-thought for the post-pandemic working environment. If staff proximity to the business location is less of a priority, then transport links, broadband services and 5G rollout need to be revisited to support more flexibility across the UK. There is a risk that without increased Government support, regions that were previously globally competitive locations for business might go backwards economically and any wider progress that had been made will be lost.”

The survey was the third in RSM UK The Real Economy series of topical quarterly surveys focusing on the middle market as the powerhouse of the UK economy. It was also used as a means of uncovering the wider infrastructure challenges faced during the global pandemic. The Real Economy is the first authoritative source of economic data from this crucial area of the UK business market, sharing insight and perspective for the wider economy.