Transport funding should be devolved to councils

The government should abolish the Highways Agency and devolve its funding to councils and other local bodies, a report commissioned by the Local Government Association has concluded.

The analysis by the Localis think-tank found that localising transport spending could provide better economic benefits than if the government continued to manage it centrally.

Only around œ1.2bn or 10% of public sector transport spending is currently given to councils although their projects tend to achieve higher returns, according to The road to growth. Schemes are considered to have ‘high’ value for money by the Department for Transport if they produce œ2 of economic benefit for every œ1 spent. Council projects often have a much higher return, with more than a quarter achieving a benefit-to-cost ratio of 5:1, according to the National Audit Office.

Currently, the DfT is planning to devolve some additional funding to town halls. The LGA urged ministers to go further and merge funding for local transport schemes into a ‘single pot’ as part of the government’s response to Lord Heseltine’s growth review.

With a dozen capital grant funding streams from the DfT alone for councils and Local Enterprise Partnerships, it was now ‘increasingly difficult’ for local authorities to plan projects, the LGA said.

The single pot should include funding from the Highways Agency as, in a more localist funding system, ‘an unaccountable middle-man in the form of the Highways Agency is no longer required’, the report stated.

It highlighted that in Cornwall, a plan to upgrade the A30 road had been led by the council after it agreed a deal with the Highways Agency and the DfT. The authority reassessed the Highway Agency’s original scheme and reduced the projected cost by œ20m to œ59m. Following DfT provisional approval, it is hoped construction will begin in January 2015.

Launching the report today, LGA economy and transport board chair Peter Box said: ‘The government has taken some positive steps in devolving decision-making on transport to local areas, but to harness the full potential of our national and local networks it needs to fully release the reins.

‘At the moment, investment and innovation is being stifled by a burdensome top-down approach by the Department for Transport and Highways Agency and a confusing and wasteful myriad of different funding.’

Localis chief executive Alex Thomson added: ‘The report highlights some of the alternatives to a centralised transport system, with Europe far in advance of the UK in this respect. On the continent, transport devolution is seen as a given. The current government has been very positive in pursuing a localism agenda across a number of policy areas, and it is time they extended this approach to transport.

‘With transport being an essential part of stimulating and maintaining thriving local economies, greater local influence over commissioning and new flexibilities around infrastructure finance are needed if the government wants to empower local authorities to get Britain growing again.’

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