Infrastructure investment : the impact on consumer bills, cross-government

Government and regulators do not know by how much overall expected new investment by the private sector in infrastructure will increase household utility bills and whether bills will be affordable.

The National Audit Office has recommended that the Treasury ensure there are mechanisms to assess the cumulative impact of infrastructure investment on consumer bills.

This report, which focuses on the energy, water and, to a lesser extent, telecoms sectors, recognizes that the UK requires significant investment in new infrastructure.

The Treasury expects that over two-thirds of the GBP310 billion worth of the planned infrastructure it has identified will be privately financed, owned and operated but paid for by consumers through their utility bills.

High levels of expected new investment in infrastructure mean that energy and water bills may rise significantly from current levels.

The available projections suggest that increases in both energy and water bills will continue to outstrip inflation, on average, up to 2030.

This is particularly concerning, given that energy and water bills have increased significantly in recent years, while incomes have not. The affordability of utility bills can be assessed only in the context of wider pressures on household expenditure, including an understanding of all household bills as well as potential trends in household incomes.

There is a range of schemes to support vulnerable consumers but without a fuller understanding of affordability in the round, government and regulators cannot assess the adequacy of these schemes, now or in the future