Chancellor announces two new funds for local major schemes

Osborne: boosting transport infrastructure spend

Osborne: boosting transport infrastructure spend

Two new funds to help local authorities deliver major transport improvements were announced this week in the Government’s spending review.

A £475m Local Majors Fund will be established to deliver schemes that are too big to deliver from Local Growth Fund allocations. There will also be a £300m Transport Development Fund to support work on planning major infrastructure schemes. 

Other transport headlines in Chancellor George Osborne’s spending settlement included a new cost estimate for the HS2 project; the protection of Bus Service Operators Grant; and phasing out revenue grant for Transport for London. Active travel campaigners were left disappointed by the level of funding pledged for walking and cycling. Meanwhile, local government in England is to be hit by a big reduction in Government grant.    

DfT capital spending will more than double over the next six years: £6.1bn (2015/16), £6.3bn (2016/17), £7.6bn (2017/18), £8.9bn (2018/19), £11.4bn (2019/20), and £12.4bn (2020/21). 

Spending by Highways England and on high-speed rail accounts for much of the increase. Between 2015/16 and 2020/21, spending on the HE’s roads investment strategy will total £15.2bn and spending on High Speed 2 will total £15.8bn.

The DfT’s resource budget will fall by 37% by 2019/20. Resource spending will be: £2.6bn (2015/16), £2bn (2016/17), £2.1bn (2017/18), £2.2bn (2018/19), and £1.8bn (2019/20). 

The Government confirmed a new cost of HS2: £55.7bn in 2015 prices for the London to Birmingham route by 2026 and to Leeds and Manchester by 2033. This includes the cost of new rolling stock and represents a £5.6bn increase on the old figure, which was in 2011 prices. 

The new £475m Local Majors Fund may be exclusively for road schemes – in one table it is  described as a Large Local Major Roads fund. It will not commence until 2019/20 (£0.1bn), rising to £0.3bn in  2020/21. The DfT says it could deliver projects such as the North Devon Link Road; the A391 improvement in Cornwall; and Suffolk’s Lowestoft Third River Crossing and Ipswich West Dock Crossing.

The £300m Transport Development Fund will support development work on “transformative transport infrastructure projects” including Crossrail 2 and projects in the Northern transport strategy. Projects will be chosen following advice from the National Infrastructure Commission chaired by Lord Adonis.

The settlement includes £300m for cycling in England between 2015/16 and 2020/21, which is understood to be broken down as £210m capital and £90m revenue. This includes the previously announced £114m for the Cycle Ambition City scheme. 

The settlement also includes a  budget line for the Local Sustainable Transport Fund, with £0.1bn allocated each year 2016/17 to 2020/21. This is expected to be paid through the non-ringfenced Local Growth Fund. 

There are also reports of  £80m over four years for revenue funding for sustainable travel. 

Sustrans policy director Jason Torrance said: “Unless further detail emerges that increases cycling and walking investment… the cycling and walking strategy, which the Government is compelled to publish by law, will not be funded.”

The Government’s decision to protect Bus Service Operators Grant has been welcomed by the industry and bus user groups.  However, campaign group Greener Journeys said the big cuts to local government grant could see further reductions to public transport support.

Local government grant is to be more than halved from £11.5bn in 2015/16 to £5.4bn in 2019/20, with the revenue support grant phased out.

Transport for London’s resource grant will also be phased out. The grant represents 6% of TfL’s annual budget, and its abolition will save the Government £700m in 2019/20. The DfT said TfL could fill the gap by making more efficiencies or generating income from the 5,700 acres of land it owns.  

Each of the devolved administrations will receive a capital funding boost through to 2020/21. The Scottish Government will receive £1.9bn more than if it had been held at 2015/16 levels; the Welsh Government £900m more; and  Northern Ireland Executive £600m more.