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TfN sets out thinking on long-term funds

23 March 2020

Transport for the North may seek a three-year spending review settlement from Government worth £250m to fund development work for its strategic transport priorities. The sub-national transport body has also spelt out its thinking on becoming the budget holder for major road and rail projects in the longer-term.

Details were presented to last week’s board meeting by Iain Craven, TfN’s finance director, and James Mills, its corporate engagement lead.

They said a submission prepared to the Government’s aborted 2019 spending review had sought £244m for project development work over three years, including circa £40m of irrecoverable VAT.

“Between now and the spending review, TfN will both further refine the ask of Government and at the same time plan for how this step-up in activity could be managed into 2021/22 and beyond,” said Craven and Mills.

TfN ultimately wants to be the budget holder for strategic transport projects in the north of England. 

Craven and Mills said the Government should establish a Northern strategic transport budget, funded by general taxation rather than specific transport revenue streams.

 “Neither Vehicle Excise Duty nor access to [rail] franchise surpluses would provide Transport for the North with any kind of multi-year funding certainty and may in the case of the former be in long-term decline,” they said. “Therefore, they should not be prioritised by TfN and they should only be considered as ‘in addition to’, and not ‘in place of’ existing funding sources.” 

TfN should be given a share of “centrally collected national funds... as that is where the major tax-raising powers to fund such activity are held at this point in time”.  “This could take the form of periodic spending review ‘asks’ that would be derived from the [TfN] investment programme or from a longer-term Barnett-type formula.” 

Any settlement should cover road and rail and be multi-year and should feature a ‘double / triple-lock’ style guarantee from central government to safeguard a minimum increase of budget growth over the medium to long-term. 

“This does not require Transport for the North to be a delivery body for now – work would continue to be carried out by national agencies or Transport for the North partners / local authorities,” said Craven and Mills.

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