Boost for £500m transport projects

Author: Jim Pickard and Mark Odell, the Financial Times - Dec 13, 2011

More than 20 local transport projects with an overall value of £500m will receive fresh funding from the government as it tries to boost infrastructure spending, the Financial Times has learnt.

The list of two dozen, mainly road, schemes has been drawn up by Justine Greening, the transport secretary, and are likely to be announced as early as Thursday.

The projects, some of which are dependent on receiving money from local authorities, are in addition to 20 other transport projects announced in last month’s growth review.

It is understood that the largest of the projects is a new “northern distributor road” in Norwich which will see £86m of funding from central government towards a £111m scheme. It is still dependent on Norfolk county council agreeing to fund a separate package of sustainable transport measures in the city centre.

In Bristol, Ms Greening is expected to give the green light to a new bus rapid transit scheme travelling from north to south through the centre of the city.

The £93m project, which will receive £50m from the government, will feature segregated bus lanes carrying passengers from the Bristol Parkway station to the north of Bristol, down to Hengrove in the south.

Leeds will receive funding for a £25m programme of maintenance work on the city’s inner ring road. Civic leaders in the Yorkshire city have warned that the road could have to be closed if the money was not forthcoming.

The Department for Transport refused to comment on Wednesday.

The news came as the National Audit Office warned that budget cuts to the Highways Agency – from £3.2bn to £2.1bn by 2014-15 – could lead to “deterioration in road quality and higher long-term costs to the department or local authorities”.

The NAO, the government’s spending watchdog, also suggested that plans to increase regulated rail fares could backfire by boosting train companies’ profits rather than benefiting the taxpayer.

Published on Wednesday its report found that an assessment by the Department for Transport had flagged as a “significant risk” its ability to secure the full benefit of any fare increases as they were dependent on commercial talks with the train operators.

The report was compiled before last month’s government decision to delay plans to increase regulated fares, which cover peak times and season tickets, by 3 per cent above retail price inflation. Instead, fare rises will be limited to an average of RPI plus 1 per cent, in line with longstanding government policy.

But the government was still expected to revert to RPI plus 3 per cent for 2013 and 2014 as set out in the spending review this year.

Critics have long argued that rail companies benefit from any rise in fares at the expense of passengers. But the DfT and industry rejected suggestions by the RMT union that the private operators were committing “daylight robbery on an unprecedented scale.”

A spokesman for the DfT said: “We remain confident that any possible future fares change would yield its full anticipated value to the taxpayer and not to train company profits.”