THE GOVERNMENT’S crucial plan to boost UK growth by rebuilding its crumbling infrastructure system is doomed to failure, according to a report released today by an influential group of MPs.
In a startling call to arms, the public accounts committee says the coalition’s plans to prevent the transport system from grinding to a halt and the lights from going out lack focus, are unattractive to overseas investors, and will raise the cost of living.
The committee claims the Treasury’s list of 40 so-called nationally important projects – which range from rail electrification to new container ports – would cost £310bn to build by 2020, a figure it says cannot be credible in the current economic climate.
Squeezed consumers could even face higher fares and energy bills if some of the projects go ahead, the MPs said.
Projects on the government’s list include improvements to the M3 and M25 motorways, backing for a new terminal at Heathrow airport, and a new super-sewer under the Thames.
“Investment in infrastructure is crucial for stimulating economic growth. However, 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,” said committee chair Margaret Hodge MP.
“The government must ensure that there is sufficient certainty to secure the necessary private sector investment in a climate where the competition for capital is internationally competitive,” she added.
John Cridland, director general of the CBI, said the government should cut the list down to size and focus on a handful of key developments: “I have a queue of businesses at my door telling me delivery of the government’s infrastructure plan needs speeding up.”
“We need ministers to pick three or four big infrastructure projects that demonstrate to investors what we can achieve and then doing everything in their power to see them through.”
Despite announcing a major guarantee scheme just two projects have received backing: a £75m loan to allow Drax power station to burn biomass fuels, and a tentative agreement to support the £1bn extension of the Northern Line to Battersea.
Worried that progress was slow, former London 2012 chief executive Paul Deighton has been made a Treasury minister with a remit to ensure Whitehall delivers major projects. The government is keen to avoid a repeat of troubled plans to build new nuclear power stations in the UK, which have been plagued by delays and bidders pulling out. Despite granting French firm EDF planning permission for a new generator at Hinkley Point in Somerset, the £14bn project still hinges on complex state guarantees.
Last night a Treasury spokesman insisted the plan is on track: “We do not agree with the committee’s depiction of the government’s infrastructure delivery plans. Planning and delivering vital long-term infrastructure is a central economic priority.”