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Osborne puts roads back on the agenda

Road building was this week back on the government’s agenda after £1.25bn worth of schemes were given the green light in chancellor Gorge Osborne’s Autumn Statement.

Screen_shot_2011_12_08_at_13.03.15

Billion pound boost

The £1.25bn was part of a £11.3bn boost for infrastructure.

The statement confirmed that £6.3bn more will be spent on infrastructure in the next three years, although £1.3bn had already been announced. Osborne added that a further £5bn would be found for projects in the next spending review period.

The dramatic change of policy comes a year after the 2010 Comprehensive Spending Review halved capital spending on roads.

As a direct result of that review £2.3bn worth of road schemes were either cancelled or mothballed − mostly until the next spending review period which starts in 2015. Last week’s announcement reverses many of those decisions.

Schemes that were last year put back until after 2015 − but which have now been brought forward include:

  • the £125M A14 Kettering Bypass (starting in 2012/2013)
  • the £110M A45/46 Tollbar End improvement
  • the £160M A453 widening
  • the £150M M1/M6 junction improvement
  • studies of options for the M25 junction 30 near the London Gateway port.

Also revived for this spending period are two Managed Motorways schemes − the M3 junctions 2 to 4a and the M6 junctions 10a to 13. They will receive £270M of government funding between them.

Improvements to the M25 and M1 are also being accelerated so rather than being prepared for construction in the next spending period these will now be funded with £120M in 2014/2015.

Osborne also revealed that the government had identified three possible locations for a Lower Thames crossing that would be analysed before a public consultation is launched in 2013.

He also announced an entirely new project to build a £165M dual carriageway link road between the M56 at Manchester Airport and the A6 south of Stockport.

Welcome surprise

Construction leaders welcomed the surprise announcement. It came just weeks after roads minister Mike Penning urged the construction industry to “think outside the box” to try and leverage in private sector investment in roads as the scope for public spending has been squeezed (NCE 3 November).

But commercial secretary to the Treasury Lord Sassoon refuted suggestions that the government had changed its mind about investing in road building.

“At the June review [in 2010] we picked up the previous government’s programme,” he said.

“We did a limited amount of analysis to discover the central economic return [of projects]. But we needed to take the time to do a professional job, which is fully justified.

“It wasn’t that we changed our minds.”

In addition to the schemes revived or brought forward, the Autumn Statement confirmed that the government would consider looking at “innovative financing mechanisms including tolling” for future capacity improvements on the A14.

Tolling a possibility

Sassoon said that the government would look at tolling for other “major new” road schemes.

However, Treasury body Infrastructure UK chief executive Geoffrey Spence warned there were “some people who have got burnt on toll roads”.

He added that there were “bad toll roads and good toll roads” and suggested it was possible
to argue that the M6 Toll was a bad example of tolling because there is an alternative free route nearby.

Other transport schemes are also set to benefit also from the additional infrastructure spend in this review period.

Network Rail is set to benefit from an additional £1bn which will include funding for
electrification of the Transpennine express route and the East-West Rail project between Oxford and Bedford.

And there was an extra £250M for local transport schemes.

But some energy groups expressed concern that there was little in the statement about energy.
Lord Sassoon said this was because many energy schemes were already underway and that the energy market review was “progressing on its own timescale”.

“We needed to take the time to do a professional job, which is fully justified. It wasn’t that we changed our minds”

Commercial secretary to the Treasury Lord Sassoon

With regard to new nuclear he said the government was “keeping to timescales on the decisions that are needed”, and in the wind power sector “everyone has had the assurances they need”.

The extra cash for infrastructure has been clawed back from other departments that had underspent (News last week).

This included the Department for Energy and Climate Change (Decc), which lost the £1bn it had allocated to carbon capture and storage (CCS).

Defending the government’s position on CCS, Spence said the industry “will be reassured that we’ve listed it as one of the top 10 projects”.

Readers' comments (2)

  • It all sounds an excellent idea and will hopefully get many Highway Engineers back into their primary line of work. I'm sure I'm not alone in saying "I'll believe this when I see the tenders and detailed design coming into being and work actually materialising.

    Vicky Bache

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  • There is a clear need for long term strategic planning for UK infrastructure to develop and deliver a sustainable rolling plan of interventions and enhancements for our infrastructure network. Whilst the Chancellor's announcements on investment are to be welcomed it once again appears to be a knee jerk reaction to the UK's current socio-economic situation which is driving events rather than progressing delivery on the back of a credible long-term intent. This stop-start process once again leaves the industry lurching between feast and famine and a more sustainable approach to funding infrastructure development delivery is clearly required to give both the people and the markets confidence in future demand.

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