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The fight for funding

Transport Spending

Key transport projects face the axe this summer as chancellor Gordon Brown battles to sustain the government's commitment to huge health and education programmes. This week NCE launches a campaign to save transport from cuts.

The spectre of stop-start construction could reappear this summer when government unveils its revised 10 year transport plan and chancellor Gordon Brown publishes his comprehensive spending review. Start dates for new road schemes are slipping backwards by years as are rail renewal projects.

Even if government reaffirms its commitment to spend billions on transport, most of the spend is now expected between 2010 and 2015, contractors are warning.

This year could be the biggest test of New Labour's transport policy as Brown will attempt to reconcile efforts to boost education and health spending with the need to tackle congestion and improve Britain's transport system.

The review will set out public spending targets for the next three years, and will effectively set in train spending for delivering a large chunk of the government's 10 year transport plan.

But Brown is in a tight spot. Last year he had to increase government borrowing to plug gaps in tax revenue created by slower than expected economic growth. He also increased National Insurance contributions to fund higher spending on the NHS.

Room to raise more money is extremely limited and it is likely budgets will have to be cut if the country's books are to be balanced. Transport could be a major casualty.

The risk has already been highlighted by London mayor Ken Livingstone who warned engineers that they had six months to save transport spending (NCE last week).

The spending review in 2002 set up a steep rise in transport spending. It programmed an increase from around £7.6bn in 2002/03 to £11.6bn in 2005/06.

But the government's transport budget is tiny compared with the huge budgets for health and education.

The 2002 spending review programmed education spending to rise from £45bn in 2002/03 to £58bn in 2005/06. The annual NHS budget was also programmed to rise from £68.7bn to a huge £110bn over the same period. It is clear where the government's priorities lie.

The civil engineering community cannot afford to sit on its hands and hope that transport spending escapes the axe. The government needs to be reminded of its commitment to vote winning schemes which will tackle road congestion and improve the lot of rail commuters.

As the spending review looms, a whole series of major transport projects are coming forward.

Many, like London's £750M East London Line extension are ready to go out to tender (NCE 11/25 December 2003). Others need money so they can progress including London's Thameslink 2000 rail upgrade and the eastwest London Crossrail line, plus the much needed M1 and M6 widening schemes.

Without these projects, government transport policy will be compromised and the economy will suffer. Well rehearsed predictions that international investors will spurn Britain because of its unreliable, overloaded and under funded transport system will start to apply.

Engineers need to act now to ensure the government takes its commitments to transport as seriously as those to other aspects of Britain's economy.

Contractors fears

'It's not the specific schemes, but the guarantee of spend that is the concern, ' says Civil Engineering Contractors Association North West chairman Ian Robinson of Cumbrian Industrials.

'Expenditure seems to be moving backwards and it is creating concern at a time when contractors are being asked to invest in gearing up for new forms of procurement.

Everyone, especially the small and medium sized contractors, need certainty and predictability as to when the money will come into the market.'

Commentators are predicting that a high proportion of Highways Agency Targeted Programme of Improvement schemes will not be on site until 2010 even though they have government commitment. The majority are, according to the Agency's 2003 business plan, scheduled to start no later than 2007.

Delays in getting the schemes to planning inquiry following the introduction of early contractor involvement (ECI) schemes are claimed to be part of the cause, but there are also strong rumours of budget problems.

'We are looking at an interval of two years in the roads programme, ' says CECA economic adviser Jim Turner.

As a result contractors are very worried about the gap in workload. Early involvement in schemes via ECI will not make up the shortfall.

'There are very long lead in times with ECI and while we do get reimbursed for design it involves us in tying up large numbers of senior people for low returns, ' says one contractor. 'Its shop keeping, but we make our money taking the risk on construction.'

In the rail sector, extra money earmarked for maintenance is evaporating as far as contractors are concerned, as the work has been taken in house by Network Rail. This has limited spending on contractors to renewals only and spending on this work is being cut anyway.

Priority projects

National

A1 widening M1 widening M6 widening Wales M4 extension - Wales

Southern England

South Hampshire Light Rail Stonehenge tunnel Hindhead tunnel Handy Cross exit M40 Reading Station

London

Crossrail East London Line Thameslink M25 widening Thames Gateway Bridge

Eastern England

Cambridge to Bedford improvement

Midlands

M5 widening - south Birmingham M1/M6 junction WCML Trent Valley

North

A505 Stoke Manchester metro extension A66 widening New Mersey crossing at Runcorn

Scotland

Edinburgh tram Glasgow airport rail link Edinburgh airport rail link Edinburgh Waverley Station remodelling M74 extension Kincardine Bridge M8 improvements A90 M80 improvement M73

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