The Government’s Infrastructure Plan is dismissed as “simply a long list of projects requiring huge amounts of money, not a real plan with a strategic vision and clear priorities” in a new report from the Public Accounts Committee published on Monday.
The Treasury has identified £310bn of works that need investment, with £200bn to come from the private sector, reports The Telegraph.
Echoing the MPs’ concerns, the London School of Economics’ Growth Commission has called for “a new architecture for national infrastructure decisions to reduce policy uncertainty”.
John Van Reenan, of the Growth Commission, claimed the Government had simply created a “wish list with no analysis of how they are going to deliver. It’s pretty chaotic.”
Business groups also called for improvements. John Cridland, CBI director-general, said: “I have a queue of businesses at my door telling me the Infrastructure Plan needs speeding up.”
The reports will be seen as a criticism of the limited success the Government has had since establishing its specialist unit, Infrastructure UK, in 2010. They also come ahead of figures this week that will provide clues to whether the economy has continued to grow, following a surprise 0.3pc rise in the first three months of the year.
Plans to encourage pension funds to invest £20bn in public infrastructure have fallen short of target as, 18 months since they signed up, no projects are off the ground. A separate £40bn taxpayer guarantee scheme launched at the end of last year secured its first private sector deal only last week, for £75m.
Margaret Hodge, PAC chairman, said: “Investment in infrastructure is crucial for stimulating growth.” But she said the Treasury had not properly prioritised its 200 key projects – including roads, rail, airports, and ports – and had deterred investment by policy indecision.
“Investors will be reluctant to invest… until government policy is clear and consistent. Uncertainty can deter or delay investment and [add to] costs,” the report states.
The MPs also warned that consumers would shoulder the bulk of the costs through higher fares and bills, so-called “regulated prices”, piling pressure on cash-strapped households. Regulated prices have already been described by economists as “tax rises masquerading as price rises”.
Investors should also demonstrate “that their returns are reasonable and that any government support is justified”, as some risk will be offloaded to taxpayers and consumers under the infrastructure arrangements, the MPs said.
Speaking yesterday, former Chancellor and Cabinet minister Ken Clarke said the economy was just “keeping its head above water” and that there were “one, two, three years even, to go” of weak growth.
The Treasury argued it was the first time the Government had an infrastructure plan and a minister charged with delivering it.