A mere 14 percent of surveyors canvassed by the Royal Institution of Chartered Surveyors (RICS) believe that the UK government will be successful in meeting its Autumn Statement pledge to generate some £20 billion (€24 billion; $31 billion) of funding for infrastructure projects from institutional sources of capital. The finding was part of the RICS Construction Market Survey for the fourth quarter of 2011.
The survey found growing pessimism in the UK construction industry, with 7 percent more respondents reporting falling workloads than in the previous quarterly survey. Surveyors were also sceptical about the government’s Get Britain Building Fund – a £420 million fund for new house building launched by housing minister Grant Shapps towards the end of last year. Only 25 percent thought the fund would have a positive impact.
Presenting the results of the survey, RICS chief economist Simon Rubinsohn said the questions raised over the government’s plan to secure institutional funding for infrastructure projects were “particularly worrying”. He added: “We would hope that this scepticism proves to be overly pessimistic, but the response highlights the sizeable job the government still has to do in convincing industry professionals that this approach is going to deliver.”
Infrastructure Investor last week canvassed industry professionals on the plans and found a similar level of wariness. For one thing, there was a view that focusing on the UK market would force UK investors to put all their eggs in the same basket and not give them the geographic diversification they need. Some also mentioned the terms being offered by the government – including the level of returns they would be able to make.
One pension manager commented: “Governments tend to think short term; we need to think long term.”