Middle market businesses urge government to prioritise investment in rural broadband


New research has found that almost half (43%) of the 400 UK middle market business leaders questioned said prioritising investment in rural broadband and 5G would bring the most significant benefit to their business.

RSM’s Real Economy Report also revealed that 80% believe investment in telecommunications more broadly, would bring the greatest benefit to their businesses’ day-to-day operations. The study into digital infrastructure comes as the Government announces that the £5bn Project Gigabit upgrade plan will only connect 85% of the nation to high-speed broadband by 2025.

The research also reveals that an overwhelming majority (93%) of middle market businesses feel the Government should prioritise investment in digital infrastructure.

Asked how important it was that the Government prioritises investment in digital infrastructure to ensure the effectiveness of their own business operations, 54% answered, ‘very important’, whilst 40% said it was ‘somewhat important’. That left just 6% who felt it was unimportant.

Over three-quarters (76%) said they may turn to the Government’s Help to Grow Scheme for financial support, although eligibility for this scheme remains a challenge for some. The scheme is intended to give SMEs management skills and subsidies to encourage adoption of digital technologies, however this is dependent upon access to fast, reliable broadband.

Chris Knowles, chief digital officer at RSM UK, comments: “Investment in fixed and mobile broadband infrastructure to support remote business working and cloud-based technology is crucial to the post-lockdown recovery and is a key factor in enabling economic growth. During the 2019 election the Government promised to invest £5bn to help bring gigabit-capable broadband to all homes and business across the UK, yet this promise had been diluted and apparently de-prioritised. We are keen to see the promises of Project Gigabit delivered as soon as possible to communities and business regions most in need. While the Help to Grow scheme announced in March, to invest £520m in SME growth through technology advice and software discounts is helpful, a real commitment to investment in UK digital infrastructure is urgently needed.”

The survey by the audit, tax and consulting firm also demonstrated that overall a lack of adequate UK infrastructure beyond just digital, is hindering economic growth, as 64% said it is impacting their local economy and 63 per cent said it is hurting their business.

Despite the current difficulties, nearly three quarters (74%) of businesses said they believe there will be meaningful action from Government in the next three years to deliver significant national infrastructure enhancements. They are not just relying on Government action though, as 79 per cent of businesses surveyed said they plan to make capital investments to improve their own infrastructure within the next three years.

Joe Brusuelas, chief economist at RSM, comments: “One critical component of any national build-out of infrastructure will be the delivery of broadband to every village, town, school and hospital through the economy. The changes unleashed by the pandemic are not exclusive to how we work. Rather, modernisation of the national infrastructure needs to include how we learn and sustain our own wellbeing. It’s through that modernisation that the promise of the digital transformation of the economy that will take place in coming years includes individuals that otherwise might be left behind. That is why we continue to make the case that the rebalancing of the UK economy, the levelling up agenda and the digital transformation of the nation are dependent upon policy makers delivering on infrastructure modernisation.

“As the Government continue to fight the pandemic, there is a risk their commitments to digital infrastructure could be further downgraded. To survive and thrive in a post-pandemic economy, middle market businesses need the Government to re-commit to its promise to extend superfast broadband to all UK homes and businesses and give full ministerial support to the UK Gigabit Programme.”

The survey was the third in 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.