New plans to devolve transport funding decisions to local transport bodies are good for the government’s localism agenda, but they could signal the death of big schemes.
Transport secretary Justine Greening is consulting on a new plan to devolve funding decisions on local transport schemes to yet-to-be-created local transport bodies.
The government is proposing that from 2015 local transport bodies be set up to decide for themselves how to spend their money on priorities best suited to their local needs — without Whitehall approval. Currently central government must approve all schemes over £5M.
The transport bodies would likely be set up to match the geographic boundaries of the 39 Local Enterprise Partnerships (Leps) and would involve both Leps and local authorities.
The government is proposing that central funds — totalling £1.7bn in the current spending review period — be allocated to the bodies using a formula, with the cash most likely to be divvied up on a per capita basis.
If even the same funding pot was maintained over the next spending review period – and given the current state of the economy this is far from given – this would mean just £43M is made available on average to each body.
The average cost to central government of a local major scheme under the previous government’s Regional Funding Allocation system was around £30M – just one of these schemes would eat up a large proportion of one of these yet-to-be-established bodies’ budget.
Individual schemes have ranged in value from less than £10M for a scheme like the £5M A631 West Bawtry Road Improvement, to over £200M for the Manchester Metrolink extensions, for example.
The new system seems biased in favour of the small – there would no longer be a £5M threshold defining a major scheme, meaning that a scheme of any size or on any network could potentially be prioritised and funded within a given allocation, where this is seen as a local priority.
Engineers fear that this new, very local approach, will mean bodies are drawn towards using the cash for small projects like the A631 scheme, leaving medium to large schemes such as the Manchester Metrolink in limbo.
Greening’s hope is that the authorities will team up for larger schemes, but engineers see this as unlikely, as each body, inevitably dominated by the main county or unitary council, fights for its own schemes. Leps, one senior highways engineer tells NCE, are so far little more than “talking shops”. The power remains with the local authorities, so getting cross-boundary schemes off the ground will be a challenge, he fears.
Greening’s consultation document says the new system has been designed to encourage decision-making across Lep boundaries by allowing the creation of local transport consortiums. These would group together bodies in a number of Lep areas to manage big schemes.
But the government says it will not force consortium formations, “which have to be right for local areas”.
Engineers are again sceptical. Similar problems beset Labour’s Regional Transport Board (RTB), since disbanded by the coalition government as part of its localism agenda.
The RTBs were generally part of the Regional Assembly structure and advised government how to spend cash under its Regional Funding Allocation (RFA) system.
Then, RTBs were often highly critical of the limited funding available – funding was again allocated on a per capita basis leaving relatively sparsely populated regions such as the North East permanently scratching for cash for upgrades of key arteries like the A1. Many regions like the North East found it hard to prioritise schemes as a result.
Other regions including the South East had more cash, but still found it hard to prioritise. It, memorably, directed a large chunk of its budget towards the £373M A3 Hindhead Tunnel – much to the fury of others in the east of the region. But it got built.
The new system does not provide any more money; rather it spreads what there is even more thinly. So what chance is there of Hindhead happening under the new system? Many would argue very slim indeed.
Even more significantly, schemes like the A303 Stonehenge tunnel, which failed under the RTB system because it sat in the south east region yet the benefits would be felt by those in the south west, seem even further away. If two regional bodies couldn’t agree on its priority, what chance do half a dozen local authority-led local transport bodies have?
Legal firm Norton Rose partner and head of planning Nigel Hewitson says the new plans would scupper projects because of conflicting perspectives within local communities.
“There’s always going to be conflicting interests – usually between the larger community and the people who will have a proposed project ‘in their back yard’ so to speak,” he says. “One of the advantages of regional government is that it can make decisions that are for the benefit of the larger community as a whole and not just a few people.”
Greening says she wants a system “more responsive” to local needs. “These proposals could hand real power to communities so they can make locally accountable decisions on what transport improvements are needed in their area,” she adds. “This is a key plank to our localism agenda.”
And therein lies the problem – good for locals, bad for the big vision.