Balfour Beatty has warned the UK Government that major infrastructure projects are under threat following the country's decision to leave the European Union.

In its 'Infrastructure 2050' report, the contractor said prolonged periods of uncertainty will impact infrastructure investment "in the medium to long term".

With a skills shortage currently affecting the industry, uncertainty around the free movement of labour "could cause the industry recruitment and staffing difficulties and may increase costs where demand for labour outstrips supply, with the subsequent risk of project delays."

The contractor added: "This will be particularly relevant for mega projects such as HS2 and the nuclear new build programme. In our view, this requires an early and integrated policy response to both retain the skills of those who have migrated here and to ensure that the UK remains an attractive place for talented people to move to. The country must maintain its skills base."


While private investment may also be slow as the UK negotiates its exit from the EU, Balfour Beatty said the current climate is ideal for the UK government to borrow money in order to finance infrastructure projects.

"Infrastructure investment delivers significant benefits, not only in terms of direct employment relating to the build and long term maintenance of a scheme and the spend that goes via the supply chains; there is also a well-documented multiplier effect," it said.

"Economists estimate that every £1 spent on construction generates £2.84 in total economic activity at least 90% of which stays in the UK.

"This could be an opportunity for the much talked about diversification of the economy away from financial services and back towards industries such as engineering, construction and manufacturing, as the UK may no longer be bound by single market rules which restrict a more active industrial policy. This, in turn, would support the rebalancing of the economy more evenly across the regions ."

To view the full report, visit here.

(LM/CD)