The Public Accounts Committee has slammed the Treasury over a lack of certainty, the National Infrastructure Plan and investor transparency in a report published today.
The committee said it was “not convinced” proposals in the NIP were credible in the current climate, or that they presented a “rigorous plan with clear priorities for action”.
An update to the National Infrastructure Plan was published in December 2012, with more than 500 prospective projects and new economic infrastructure expected to cost £310bn.
The PAC also criticised the priority projects list of 40 key programmes, saying many were “broad categories” including more than 200 projects in total.
“This does not suggest a properly targeted and prioritised infrastructure plan,” they concluded.
It was also suggested that the Treasury needs to work “more forcefully” with Whitehall, regulators, contractors and investors to agree priorities and to meet costs.
Evidence was taken from infrastructure participants, the Treasury, the Department for Transport and the Department of Energy and Climate Change.
Confederation of British Industry director-general John Cridland said: “I have a queue of businesses at my door telling me delivery of the government’s infrastructure plan needs speeding up.
“The new guarantees scheme has so far only managed to deliver two projects. More are in the pipeline but we need them delivered.
“We need ministers to pick three or four big infrastructure projects that demonstrate to investors what we can acheive and then doing everything in their power to see them through.
“We need to get the planning system working effectively, use the guarantees scheme flexibly and get these projects over the line.
“This is how we demonstrate to global investors that UK infrastructure is a prize worth pursuing, drive construction activity and build a platform for future prosperity.”
Public Accounts Committee findings
- On the Infrastructure Plan: “We are not convinced that a plan requiring £310bn of investment in infrastructure is credible given the current economic climate, the cutbacks in public finances and the difficulty in raising private finance for projects on acceptable terms.”
- On uncertainty about government policy: “Investors will be reluctant to invest in projects until government policy is clear and consistent… The Treasury should work with departments to ensure the consideration of policy proposals takes into account their potential impact on infrastructure investment and that unexpected changes are minimised to provide greater certainty to investors over government plans.”
- On investor transparency: “Most economic infrastructure investment takes place in a private sector market where investor returns are often supported by government and households bear the costs of infrastructure in their bills. In return, investors should provide sufficient information to show that their returns are reasonable and that any government support is justified. The Treasury should require investors to supply the information needed to facilitate this transparency and should reserve the right to audit such information.”