UK Parliamentary watchdog says UK Government’s infrastructure plans lack rigour
30 April 2013
The credibility of the coalition's £310bn plan to boost Britain's infrastructure and help the economic recovery has been questioned by MPs. The Public Accounts Committee (PAC) urged ministers to be "realistic" about how much private and public investment can be raised with the economy in a fragile position.
PAC chair Margaret Hodge: "The Treasury's Infrastructure Plan is simply a long list of projects requiring huge amounts of money, not a real plan with a strategic vision and clear priorities
In a report issued on April 29, the committee stressed that investment in power generation facilities, roads, railways, airports, ports and communication systems was "crucial for stimulating economic growth".
But it said: "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."
The Treasury says it has prioritised 40 programmes but the committee claimed many of these are broad and that there are 200 individual projects "whose relative priority is not clear".
"The Treasury should assess how much investment can realistically be financed and develop a coherent strategy using tightly defined criteria to identify and prioritise projects," it said.
The report also cautioned that investors would be reluctant to come forward with money "until government policy is clear and consistent".
The Treasury said it did not agree with the committee's depiction of its plans and insisted long-term infrastructure was a central priority. Last week, Drax Power became the first recipient of a UK Guarantee, with the Treasury underwriting £75m of investment in biomass energy.
Legislative and regulatory frameworks will similarly need to provide sufficient certainty to secure private sector investment at a time when competition for capital is internationally competitive.
CBI 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 achieve and then do everything in their power to see them through."
Roger Salomone of the Engineering Employers Association said: "Never has investment in infrastructure been more important,’ added . ‘With the UK stagnating and global competition intensifying, it can help give the economy a shot in the arm today and lay foundations for our competitiveness tomorrow."