The House of Commons Welsh Affairs Committee is publishing a detailed breakdown of the Government’s accumulated debt on the Severn Toll Crossings, which it had requested in light of concerns over a steep and unforeseen increase in the level of the debt. The Committee has been concerned that the level of debt will delay or prevent the much needed reductions in the level of the toll that the Committee has repeatedly called for.
The UK Government has said it will need to continue tolling after the bridges revert to public ownership to recover its own debts for building and maintaining the Crossings, but there has been tremendous uncertainty about the actual level of that debt. When the Committee inquired into the Severn Crossings Tolls in 2010 it was told that the Department for Transport’s (DfT) responsibilities for latent defects on the Crossings had resulted in an accumulated debt of £19 million. No indication was given that the accumulated debt could increase substantially. Two years later, during its recent inquiry into cross-border links into Wales, the Committee was informed that the current accumulated deficit of costs was £112 million.
The Committee was very concerned at this large increase, and requested a detailed breakdown of the Government’s debts in respect of the Crossings. The DfT has now answered the Committee’s request.
David Davies MP, Chair of the Commons Welsh Affairs Committee said:
“We were hugely disappointed that the Government did not make clear during our 2010 inquiry on the Severn Crossings Toll that the debt could increase by such an order of magnitude, to such a level. We were also concerned that the accumulation of such a high level of debt would delay the reduction in the level of the tolls that we have repeatedly called for. It is still not clear why the DfT left all the costs resulting in this debt to be borne by those travelling between England and Wales via the Severn Crossings.
“We are pleased to hear that the estimated debt is lower than we were previously told, and that the Government expects to pay it off over a shorter time period. However, at £88 million, it is still worryingly high, and there is still apparently some uncertainty over even this figure. This Committee has repeatedly called for the level of the tolls to be reduced or removed at the earliest opportunity and there is still no clear indication of when that will happen. The tolls are detrimental to the Welsh economy, which depends on links across the border, and there are negative ‘side-effects’ such as the diversion of heavy traffic through smaller, residential roads.
“The focus of the Government should now be on providing more clarity about its proposals and the timetable for when the Crossings revert to public ownership, and we will expect some answers from the Minister for Transport when he gives evidence to us on this issue on 18 June."
- Traffic on the Severn Bridge and Second Severn Crossing in South Wales represents almost a quarter of all road journeys between England and Wales. The bridges were opened in 1966 and 1996, on the M48 and M4 respectively.
- Under the contract for the construction of the Second Severn Crossing, Severn River Crossing Plc took over responsibility for the operation and maintenance of the original bridge, and the financing of the outstanding debt for its construction. In return, Severn River Crossing Plc was permitted to collect tolls from both crossings until it reached a revenue amount set out in the Severn Bridges Act 1992.
- It is currently envisaged that Severn River Crossing plc will reach the agreed revenue amount in 2018, at which point the Crossings will revert to public ownership.
- In December 2010 the Committee published a report on The Severn Crossings Toll which stated that there was a strong case for significantly reducing the cost of the toll once the bridges return to public ownership and its current debt is paid off. It said the Government must not be tempted to use the crossings as a “cash cow” when it takes over responsibility for the crossings.
- In March 2013 the Committee renewed its calls for the Severn Crossings tolls to be reduced when the Concession ends in 2018. During the inquiry on cross-border road and rail links between England and Wales the Committee was informed that accumulated deficit recoverable from tolls had risen to £112 million, as at 31 March 2012.
- Severn Crossing plc, the special purpose concession company that currently operates the bridges, had income of £81.2 million in the year to 31 December 2012. (source: FAME database)
- The accumulated deficit represents the cumulative net costs to the Exchequer in relation to the operation and maintenance of the Severn crossing, not borne by Severn River Crossing plc.