16.01.13
‘Real risks’ in Government’s infrastructure plan – NAO
The Government’s national infrastructure plan involves key risks for the taxpayer, the NAO has warned in a new report.
The report reviewed the value for money for the plan, where the Government expects to spend £130bn by 2015 on energy, rail, roads, water, waste, flood defences and digital communications.
The Government is looking for private companies to own and finance around 64% of this investment.
However, the NAO suggests that forecasting for demand for infrastructure in the long-term can be inexact and uncertainty over Government policy could lead to sponsors to defer or abandon projects in the UK.
Additionally, there is the possibility of a failure to take into account the cumulative impact on consumers of funding infrastructure projects where costs are recovered by charging users.
An increased burden on consumers may increase the risk of financial hardship or the need for unplanned taxpayer support, the report added.
The NAO is calling for the Treasury to work with departments and regulators to provide greater clarity for consumers.
Amyas Morse, head of the National Audit Office, said: “Economic infrastructure keeps the country running. Demand for infrastructure is set to increase, fuelled by population growth, technological progress, climate change and congestion.
“But there is a lot at stake in taking forward the national infrastructure plan in an environment of straitened resources, with real risks to value for money and uncertainty about the sustainability of piling costs on to consumers.
“I have made a number of recommendations which look to the Treasury, departments and regulators to provide greater clarity on the costs which taxpayers and consumers will bear. Work is already in hand to drive down the costs of delivering new infrastructure and this should continue.”
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