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Let councils raise cash for transport, says academic

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LOCAL GOVERNMENT must seize control of local transport funding and demand the right to raise local taxes to pay for congestion and infrastructure renewal projects.

That is the view expressed this week by Imperial College London transport and infrastructure professor Stephen Glaister.

Central government funds allocated in the latest spending review will be used up maintaining the current state of affairs and servicing Network Rail's burgeoning debt.

This would allow no spare cash for investment in other forms of transport, he told NCE's Interchange conference on Tuesday.

Glaister was speaking amid growing local government confusion about Department for Transport moves to delegate responsibility for congestion busting and infrastructure improvement (see below).

If councils want to tackle congestion, build new road and tram schemes, and improve local bus and taxi networks they will have to do it themselves, he said.

Local authorities' need for new transport investment runs into the billions in the next 10 years, Glaister added.

'But the national money for transport is in a real mess, ' he said. 'There needs to be a really fundamental change in the way it is funded.'

Evidence that government is in crisis over transport is clear from the The Future of Transport White Paper published in July, he claimed (NCE 22 July).

'The White Paper is extraordinarily vague and extremely white. When you open the page it's blank. There is no official view, no information as to what government expects in terms of road, rail or local transport.

'The finances of rail are frightening. Network Rail's debt now stands at £9bn.

Operating costs are covered by income but there is no provision for investment or servicing the debt. There is provision for that debt to increase to £21bn. Servicing debt that size will cost £1bn a year in interest.

'It is a terrifying situation for rail, ' Glaister said.

'Unless there is a major change in policy you cannot avoid the conclusion that all the money in the recent spending review will be gobbled up by rail.

'Government can't cope centrally as it won't increase public borrowing enough. So there are two things that can happen [for transport]: nothing, or reinvent local government.

'Local government needs the powers to raise new debt itself, and the powers to raise local taxes to repay it.'

The new prudential borrowing regime allows local government to borrow for investment, 'which I regard as an enormous step forward', Glaister said.

But to make this work, councils must have the right to raise local taxes to pay off loans rather than rely on central government allocations.

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