The Secretary of State for Transport (Mr Philip Hammond)
On 26 October, following the announcement of the conclusions of the spending review, I made a statement to the House outlining our plans for investing over £1.5 billion over the next four years on major capital transport schemes promoted by local authorities. I also set out a process for deciding which schemes would receive funding and published details in a document entitled “Investment in Local Major Transport Schemes”. I am today announcing the first set of decisions in line with the process as set out.
First, we announced in October a pool of 10 local authority schemes with very high value for money or large local contributions that we wished to support. However we challenged the local authority promoters to reduce the cost to the Exchequer and to submit revised funding bids.
I am pleased to say that through this process we have saved £45.5 million on these schemes—14% of the previously approved sums and I am pleased to confirm funding for the following schemes:
Leeds Station Southern Access: Improving pedestrian access to Leeds station (£12.4 million DFT contribution towards a total cost of £ 14.4 million)
Midland Metro Extension: Extending Midland metro tram line through Birmingham city centre (£75.4 million DFT contribution towards a total cost of £ 129.2 million)
Mansfield Public Transport Interchange: A new bus station and associated transport improvements in Mansfield (£7.2 million DFT contribution towards a total cost of £8.9 million)
Thornton to Switch Island Link: A new single carriageway road which will take traffic away from communities in Sefton (£14.5 million DFT contribution towards a total cost of £18.6 million)
Ipswich Fit for the 21st Century: An integrated package of sustainable transport improvements in Ipswich (£18.3 million DFT contribution towards a total cost of £21.5 million)
East of Exeter: Improvements to M5 J29, east of Exeter, providing access to new housing and employment areas (£10.4 million DFT contribution towards a total cost of £14.4 million)
Heysham to M6 Link Road: A bypass to the north of Lancaster, connecting Heysham to the M6 (£110.9 million DFT contribution towards a total cost of £123.3 million)
A57 Ml to Todwick Crossroads: Improvements on the A57 east of Ml J31, near Todwick (£11.8 million DFT contribution towards a total cost of £14.7 million)
Taunton Northern Inner Distributor Road: A new road in Taunton to provide additional cross-town capacity and access to areas of brownfield land (£15.2 million DFT contribution towards a total cost of £21.7 million)
These schemes will now be able to progress towards construction subject to securing any remaining necessary planning and statutory approvals and subject to confirmation of value for money where material changes have been proposed.
For the remaining scheme in the supported pool, the Mersey Gateway bridge, we are carefully considering a funding proposal from the promoters, Halton borough council. As this is the largest scheme with the most complex funding proposal of any scheme in the supported pool, we are not able to announce final funding arrangements at this point but will do so as soon as possible.
I also announced in October a development pool of 22 schemes on which funding decisions would be made by the end of 2011, and a pre-qualification pool of 34 schemes on which we would make an earlier decision on which should join the development pool.
I can today announce the promotion to the development pool of 23 schemes from the pre-qualification pool, making an expanded development pool of 45 schemes, based on their potential to offer value for money, their ability and willingness to offer savings to the DFT and, in the case of five structural maintenance schemes, the potential importance of the work to the integrity of the existing road network. The local authority promoters of these 23 schemes have indicated a potential to reduce the call on DFT funds that would amount to an overall saving of 42% on the total of the previously requested sums. I am encouraged by this and I look forward to working with the promoters of these and the existing development pool schemes to try to achieve further savings when the promoters of all schemes in the pool submit their best and final funding bids by September 2011.
As we set out in October, we do not expect that all schemes in the development pool will be funded. We will scrutinise the business case for each scheme very carefully and challenge promoters to demonstrate high value for money as well as significant savings on cost. We will also look at a range of other criteria, including deliverability and strategic fit, and will seek the views of interested parties including, where appropriate, local enterprise partnerships. The process remains competitive and those schemes that do not reach an acceptable standard will not be funded.
In respect of the schemes from the pre-qualification pool not selected for the development pool, promoters will need to consider their options. Beyond this spending review period my intention remains that we should move to a more devolved funding framework for major schemes with local enterprise partnerships and others. I will develop this framework further during 2011.
It may be that for some of these schemes there remains a reasonable prospect of funding through this route or with alternative funding sources. But there also needs to be realism. I would urge promoters of the non-selected schemes to consider, in consultation with the business community and local residents, whether further investment in the development of these schemes would be in the best interests of local council tax payers.
This Government are committed to transparency in decision making. I have placed on the DFT website a written document, as an update to “Investment in Local Major Transport Schemes”, which sets out the details of these scheme approval decisions and explains the rationale on which they have been based. The document also includes the benefit-to-cost ratios and net present values, as estimated in the spending review, of supported pool and original development pool schemes. I will also place on the DFT website the best and final funding bids and expressions of interest that have been submitted by the local authority promoters.