The National Audit Office todays warns that consumers across the UK face rising energy bills for the next 17 years.
This is because most of the costs upgrading Britain’s ageing electricity grid and network infrastructure will be met by consumers.
The NAO report (“Infrastructure Investment – The Impact on Consumer Bills’) warns: “The Treasury expects that over two-thirds of the £310 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.
“These high levels of expected new investment in infrastructure mean that energy bills may rise significantly from current levels.
“This is likely to hit those households with incomes in the lowest 10% particularly hard. 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.”
Despite some good initiatives, such as efforts by government to model future energy prices and bills, the National Audit Office is concerned by the lack of a common approach across sectors to forecasting bills or measuring affordability.
Amyas Morse, Head of the National Audit Office, added: “Government and regulators do not know the overall impact of planned infrastructure on future consumer utility bills, or whether households, especially those on low incomes, will be able to afford to pay them. It seems critical to know ‘how much is too much’, based on reliable information.”
The NAO recommends that the Treasury publish the expected overall impact on consumer bills to promote transparency and debate about new infrastructure and bill increases. In addition, departments should consider the implications for consumer bills and their overall affordability before making policy commitments influencing infrastructure.