The future of road projects was thrown into doubt this week after the Department for Transport (DfT) postponed three schemes as part of its £683M contribution to the new government’s £6bn package of immediate spending cuts.
Phase 3 of the Managed Motorways Birmingham Box, which comprises junctions 5 to 8 of the M6, has been deferred, along with spending on improvements to the A23 in West Sussex and the widening of the A453 in the East Midlands.
Environmental mitigation work was due to start on the A23 next month with construction beginning next summer. Work was also expected to begin soon on the A453 project after a public inquiry last year.
The £683M package of cuts represents 4% of the DfT’s £15.9bn annual budget. It includes a £100M reduction in Network Rail’s budget, a £309M scaling back in local authority grants, a £108M reduction in the DfT grant to Transport for London (TfL), £112M cuts from direct expenditure and £54M from the deferral of the three roads projects and by scrapping plans for new rail rolling stock (see box).
The £112M saving in direct expenditure includes a recruitment freeze and a cutback on consultants’ fees.
The cuts only cover spending for the 2010/11 period and worse could yet follow, with economic think-tank The Institute for Fiscal Studies believing them to amount to “less than a tenth of the fiscal repair job” that the previous government’s Budget had forecast as necessary.
Repeated deferrals in subsequent years would represent even bigger cuts, with the Birmingham Box Managed Motorways work alone worth up to £200M.
The Civil Engineering Contractors Association (CECA) said the deferrals will be disappointing news for the contractors involved.
“These deferrals will be disappointing for the contractors who were working on these schemes and will have been looking forward to moving from the ECI stage to delivery,” said CECA national director Rosemary Beales.
Beales said deferring the A453 project was “a false economy”. Congestion and safety issues made it a particularly urgent project, she said.
Beales said decisions to defer work on the strategic road network should have waited the autumn Comprehensive Spending Review, when “proper consideration could be given to balancing the need to cut the deficit with the need to invest in infrastructure”.
Balfour Beatty, a BAM Nuttall / Morgan Est joint venture, Carillion, and a Costain/Serco joint venture are the four companies in the Managed Motorways framework.
The Budget on 22 June and the Comprehensive Spending Review in the autumn will clarify further efficiencies that may have to be made.
Transport for London
TfL said the spending cuts will be pursued in line with the company’s existing savings programme which aims to deliver £5bn of savings over the period to 2017/18.
Previous savings have been made by reducing backroom staff and merging roles between Metronet and TfL.
“TfL has already announced over £5bn of savings over the course of its business plan until 2017/18. There is an ongoing programme on top of that to delivery further savings,” said a spokesman.
“We still believe it’s vital to invest in Crossrail and Tube upgrades,” he said.
Network Rail said it would immediately cut £50M by shelving its Better Stations programme.
It said it was working with the rail regulator to devise a strategy for other areas of savings.
The Better Stations programme came out of a report commissioned by former transport secretary Lord Adonis following a nationwide tour of Britain’s worst stations last summer. He approved funding in November.
It would have seen improvements made to ten of Britain’s most dilapidated railway stations. The report criticised the stations for failing to meet the most basic standards in the facilities offered.
Barking, Luton, Clapham Junction, Manchester Victoria, Liverpool Central, Wigan North Western, Preston, Warrington Bank Quay, Crewe and Stockport stations would have been in receipt of the emergency cash injection.
Network Rail said Better Stations was the easiest programme for them to lose.
“Mindful of the need to cut Britain’s deficit, we can make further savings and cut back on discretionary investment on programmes that do not add capacity or operational efficiency to the railway.
”Better Stations would have helped during the good times, but we need to progress to play our role during the tough times,” said a spokesman.
The Local Government Association said it was not yet clear which specific local authority grants would be hit by the cuts, nor by how much.