THE BLOG

We Need to Get a Tighter Grip on National Infrastructure Costs - After All Consumers Will Be Picking Up Most of the Tab

15/01/2015 12:01 GMT | Updated 16/03/2015 09:59 GMT

Many of us have noticed the impact of rising household bills like energy. New private spending on infrastructure will push bills up further, and not enough is being done to make sure it's affordable or this money is being invested as cost-effectively as possible.

It's vital that we invest in new infrastructure - whether that's upgrading train tracks to help us get from A to B, or building new power stations to ensure we can keep the lights on.

However, new infrastructure is expensive - we analysed the Government's National Infrastructure plan, and found that there is £327bn of infrastructure spending across the energy, water, telecoms and transport sectors planned between now and 2021. Some of that is paid for through tax. However, the majority - £214bn - will be privately funded, which means companies will eventually recoup their investment through higher gas, electricity, water or telecoms bills and transport fares.

This estimate has increased by £69 billion in the last year alone and comes at a time when annual consumer spending on essential services, including energy, transport and water, has already risen by nearly £15 billion over a decade.

£214bn of private funding in the UK works out as a whopping £1,150 per household per year. In reality, that's not necessarily how much each of us will see our bills rise. It's more complicated than that - companies might recoup their costs over a longer or shorter time, the upgraded infrastructure should bring cost efficiencies and we need to remember that businesses also pay bills, so will pay for some of these costs.

However, at Which?, we're concerned that no one has a proper grip on how all this investment will filter through into consumer bills, and whether or not we can actually afford it. As you will know from both reading the papers and your bank statements, the price of these essential services has risen substantially over the last few years. We want to see better scrutiny of infrastructure spending - to ensure it is being delivered efficiently, providing value for money, and it is affordable for consumers.

Today, the House of Commons will debate an amendment to the Infrastructure Bill that we're backing. The amendment would give the Government the power to task a new independent body with scrutinising infrastructure spending and publishing its findings. This would allow the Government to check projects are on track and decide whether new investment is affordable for consumers. We also want this new body to look at whether consumers are getting a good deal in all essential markets and assess the impact that regulators are having.

It's shocking that consumers are being asked to pick up a £214 billion tab for infrastructure investment without any real, joined up scrutiny of effectiveness or value for money. The National Audit Office and the Public Accounts Committee also share our concerns that there is no clear understanding of the impact of this investment on household bills, particularly for those on low incomes.

At a time when consumers are facing historically high costs for essentials, it's vital that there is a tighter grip on any costs that are being passed on to consumers bills. We need to invest in our ageing infrastructure but this can't be at any cost - let's hope our MPs agree.