Household bills will have to rise to pay for the government's ambitious building plans, the Commons spending watchdog warned today.
George Osborne's strategy to revive the economy by overhauling the country’s creaking infrastructure is dismissed as ‘just a long list’ of hugely expensive projects.
The Coalition has pinned its hopes on boosting growth by investment in projects ranging from the HS2 high speed rail link, to new sewage systems, toll roads and windfarms.
But the Public Accounts Committee warns that the billions needed in private sector funding will be added to energy bills and rail fares.
Margaret Hodge, Labour MP and chairman of spending watchdog the public accounts committee, said: 'Most of the £310 billion of investment needed will come from the private sector, with households shouldering the cost through higher energy bills and fares.
'Family budgets are already badly squeezed and inevitably those on the lowest incomes will be hit hardest.
'The Government needs to urgently assess the impact on consumers and how this can be contained.
‘Investment in infrastructure is crucial for stimulating economic growth.
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‘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.’
Big spender: The MPs warn that expensive projects like investing in high speed rail and wind farms will see costs passed on to customers through rails fares and energy bills
The Treasury estimates that the more than 500 projects in the pipeline will cost £310billion, with 64 per cent financed through the private sector.
But the committee’s report adds it is ‘not convinced’ the plans are ‘credible given the current economic climate’.
It also warns that struggling households face soaring energy bills and rail fares as firms which invest in infrastructure projects pass on their costs.
The spending watchdog says uncertainty over Government policy – including subsidies for firms which invest in windfarms – was causing companies to put off investment.
John Cridland, director general of business lobby group the CBI, said: ‘I have a queue of businesses at my door telling me delivery of the Government’s Infrastructure Plan needs speeding up.
Unimpressed: Public Accounts Committee chairman Margaret Hodge said she is 'not convinced' the plans
‘The new guarantees scheme has so far only managed to deliver two projects. More are in the pipeline but we need them delivered.’
The only two projects that have received loans underwritten by the Treasury since last July are the extension of London Underground’s Northern Line and a £75million investment in biomass energy by Drax Power.
This month the International Monetary Fund warned Mr Osborne was ‘playing with fire’ by persisting with austerity cuts despite sluggish growth.
Yesterday Cabinet minister Ken Clarke described the economy as ‘bumping along the bottom’.
Mr Osborne received a boost last week when figures showed the economy had averted a triple-dip recession, posting a better than expected output of 0.3pc for the first three months of the year.
A Treasury spokesman said: ‘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.
‘Government regularly monitors progress and at