The UK’s long-term failure to invest in transport, housing, healthcare and local services has made Britain poorer, according to the Resolution Foundation.

A report by the think tank for the Economy 2030 Inquiry funded by the Nuffield Foundation says the country is an ‘international laggard’ when it comes to public investment.

If the UK had matched the OECD average over the past two decades, public investment would now be a ‘truly transformational’ £500bn higher.

To remedy the problem decisions about public spending should be removed from the Treasury and handed to Parliament, the foundation says.

The report, Cutting the Cuts, says under-investment means we have fewer hospital beds per person than all except one OECD advanced country and spend more time commuting than all bar two.

As well as being too low, investment in public services is too volatile with frequent, large changes in spending plans.

The report says the current Government has reversed more than 80% of the increases announced after the general election three years ago.

The foundation’s research director James Smith said: ‘Britain’s record on public investment is one of long-term failure.

‘Our investment levels are too low and too volatile, as investment plans are announced and then scrapped before they ever get going.

‘As a result, we are left with overwhelmed hospitals, often terrible public transport and a chronic shortage of housing.

‘We need to completely reset our approach to public investment, rewriting the UK’s fiscal framework to remove the strong incentive for the Treasury to cut public investment when bad news turns up, and moving decisions about the quantity of public investment to Parliament from the Treasury.’