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Investing in regional infrastructure
Read time : 7 mins Added: 17/08/2022
Transport systems and digital connectivity are reviving UK cities and provide opportunities for businesses
The UK government has put infrastructure at the heart of its plans to level up the nation, increase opportunity and drive the journey to net zero. The National Infrastructure Strategy outlines the central role infrastructure will play in supporting economic growth across the country’s cities and regions.
Over the next 10 years, infrastructure spending is expected to total £650 billion, of which more than £300 billion will be allocated through utility companies and other private-sector businesses. The government’s target of net-zero carbon emissions by 2050 adds extra impetus to infrastructure requirements designed to both meet immediate needs and ensure long-term environmental sustainability.
Victoria Whitehead, Head of Infrastructure and Transport at Lloyds Bank, notes that the pandemic changed the way many people work and travel, adding: “I don’t think there can be a recovery of urban economies without reliable infrastructure.”
Infrastructure takes many forms and, in the digital age, as the UK transitions to a net-zero economy, transport and digital connectivity are central pillars. Both require public-and private-sector involvement, with private investment and private contractors at the leading edge of the challenge and opportunity.
Transport is being transformed in Birmingham
For InstaVolt, the UK company recently named the country’s top electric vehicle (EV) charging network based on electric car owner ratings, Birmingham and the West Midlands represent a clear opportunity for growth—not just for its own business, but for many forward-thinking firms operating in the region.
Birmingham boasts the highest number of electric vehicles of any UK city outside London, while nearby Coventry regularly tops lists of the UK’s EV-friendliest cities, thanks to its high charging-point-to-vehicle ratio and low average charging cost. There’s an ever-increasing demand for EV infrastructure in the region, and companies like InstaVolt are seizing the opportunity.
Opportunities for businesses to work with local authorities
InstaVolt CEO Adrian Keen says “We enter partnerships with businesses that own land where there is space for charging points, including big brands like McDonald’s and Costa Coffee. Our model is that we will occupy an area of their car park at no cost to the business and bring charging infrastructure to those sites, and we pay our landlords to be on those sites. In addition, Keen emphasises the importance of working with the public sector.
“There are huge opportunities for local authorities, which sit on and control vast amounts of land across the country, to also work with us in that same way,” he explains. “For example, short-stay car parks, on the high-street and some retail parks and leisure facilities are owned by local authorities. So, when they partner with us, they help bring EV charging infrastructure to their communities and drive the transition to net zero. It’s a wonderful sustainability initiative for the area, as well as an income stream for both local authorities and businesses.”
“Our busiest sites see more than 100 charging sessions a day and our data shows that retail sites can experience an increase in dwell time of up to 50% for customers charging an electric vehicle, translating into an average on-site spend of £80, up from an average of £36 per visit,” says Keen. “And that’s at this really nascent, early stage in the transition, so the potential is enormous.”
Recognising the opportunity, Birmingham City Council has developed an EV charging strategy that is being implemented by ESB Energy. The aim is to have 394 fast- or rapid-charge points installed by the end of 2022 at key locations, primarily taxi ranks and public hubs such as shopping centres.
The second phase, will expand that network to 3,600 charge points, and will be carried out in collaboration with private-sector charging system providers such as InstaVolt and businesses with locations suitable for EV charge points such as supermarkets and fuel stations.
Meanwhile, EV battery manufacturer Britishvolt recently announced a £200 million investment in a factory just outside Birmingham, which will be one of the UK’s largest upon completion, further cementing the city’s growing reputation as a hub for EV infrastructure.
Local authorities in Birmingham recognise the importance of cleaner transport to the city’s continued economic growth and are planning to make its local transport carbon-neutral by 2030. Birmingham already produces less CO2 per capita than most UK cities—4 tonnes per capita (tpc), compared to a national average of 4.3 tpc—according to Centre for Cities.
Sunderland continues to attract business investment
Like Birmingham, Sunderland is leading the way on vehicle electrification. In 2021, when Nissan, the city’s largest employer, announced plans to ramp up its production of EVs, it put Sunderland at the heart of global EV manufacturing. So, what makes Sunderland—a city that just three decades ago had an unemployment rate of around 20%—so attractive to business investment? Part of the answer lies in the city’s legacy as a manufacturing hub.
The network effect of manufacturing and engineering businesses that have confidence in Sunderland is clear. In 2017, car parts maker Unipres opened a £500,000 training academy, where apprentices master their trade in a state-of-the-art simulated working environment. That same year, US automotive seating and E-systems giant Lear Corporation chose its Sunderland plant for a £1.5 million extension.
Sunderland is involved in autonomous vehicle projects
Unsurprisingly, given its role in automotive manufacturing, the city council is a partner in the 5G CAL project (Connected and Automated Logistics) which involves a range of public and private organisations; the universities of Newcastle and Coventry, the Connected Places Catapult and Nissan. The project aims to demonstrate that autonomous freight vehicles can be rapidly shifted from automatic to manual control—a key test for the safety and efficiency of self-driving lorries.
Sunderland was one of the country’s first to establish a 5G network. “One of the great benefits of 5G is the low latency, which just means much less delay time between a mobile device and the network,” says Ben Weland, Head of Telecoms, Media, and Technology at Lloyds Bank. “That can be essential to enable other technologies, and one case is autonomous vehicles. You want your autonomous vehicle to have the best connectivity and the least possible delay in communications with any data centre it is using.”
Fuelled by inward investment and a healthy talent pipeline from the region’s five universities, the city has reimagined itself as an advanced engineering hub. But its wider regeneration is not yet complete—and the city still lags in other key metrics such as employment, skills and business dynamics, according to the Centre for Cities.
Supporting local economic growth by focusing on digital connectivity
However, the city’s leaders are addressing these issues with a focus on digital connectivity and productivity. Its city council is extremely ambitious in its connectivity strategy, and a key aspect is fibre connectivity. CityFibre recently announced the completion of a £4.9 billion debt raise via the new, government-run UK Infrastructure Bank (UKIB), which aims to fund a green industrial revolution. It also supports local economic growth by partnering with public and private entities across the UK. Weland, who coordinated with UKIB in the debt raise, calls CityFibre a “key driver in the future resilience of local economies”.
Cross-sector partnerships are vital in driving innovation and growth
Claire Rowntree, Deputy Leader of Sunderland City Council, which was named Digital Council of the Year in 2021 by Connected Britain, highlights the importance of cross-sector partnerships in making such initiatives a reality. “Here in Sunderland, we’ve always worked closely with the private and public sectors on driving forward investment and growth,” she says. “We’re very aware of hi-tech and digital innovation and building up our infrastructure, especially with a 5G network.
Connecting is the key to thriving economies
Transport and digital improvements are clear examples of the rapid infrastructure evolution underway in many UK cities. These infrastructure elements operate as part of a wider ecosystem of innovation and skills, all of which are essential to thriving local and regional economies.
“Our cities and regions are being renewed on a scale not seen since the 1950s,” says Mark Burton, Head of UK Regions at Lloyds Bank. “That renewal is essential to build sustainability into our cities. It is also a once-in-a-generation opportunity for investment, and I would urge businesses to take advantage of it.”
This content was paid for and produced by Lloyds Bank in partnership with the Commercial Team at Bloomberg Media.