Transport Press Notices

New Inquiry:

Local Transport Planning and Funding

Local transport will receive £1.6 billion for capital-funded projects over 2006-07. The Committee has decided to examine the process of planning and funding transport improvements at local authority level.

The Department for Transport is to a large extent dependent on the action of local authorities to implement its transport strategy. Local authorities are responsible for improving public transport, road safety, levels of congestion, air quality, local road maintenance, walking and cycling routes. The Department for Transport oversees local transport planning and expenditure, and works in partnership with local and regional government to achieve its aims.

Local authorities set out their planning priorities and funding needs through the Local Transport Plan process. Local authorities are about to submit their second edition Local Transport Plans, covering the period 2006-2011, to the regional Government Offices for assessment. The capital settlement includes allocations for the integrated transport block, highways capital maintenance, small schemes, and major schemes. The capital funding for 2006/07 is partly based on the past performance of each local authority and on the quality of the Local Transport Plan. The remaining 75 per cent is determined according to formula which assesses need.

The other main source of Government financial support for local transport is through the Revenue Support Grant. The bulk of funding is provided this way and it is used to support day-to-day expenditure. Local authority net revenue expenditure on highways maintenance, parking, public transport and concessionary fares totalled £3.4 billion in 2002-03. Local authorities have almost complete discretion about how much of the revenue support they spend on transport, and how much is spent on other services.

A separate planning and funding system operates in London. Under the Greater London Authority Act 1999 each of the London boroughs are required to produce Local Implementation Plans which set out how they will implement the Mayor's Transport Strategy. £136 million has been allocated to London local authorities for transport schemes for 2006/07 through the Borough Spending Plan.

Between 2001/02 and 2005/06 investment in local transport projects totalled over £8 billion. This represents a 100 per cent increase over the previous five years. Over the same period, however, the Government revoked funding approval for light rail schemes in Manchester, Leeds, Liverpool and South Hampshire. The final report of the former Transport Select Committee suggested that a future Committee might wish to consider whether local authorities should have greater powers to raise their own resources to fund local transport infrastructure. This consideration will be part of our inquiry.

The Committee wishes to examine a range of issues. In terms of local transport funding:

€ Have the local transport capital settlements met what was expected and allowed delivery of the planned projects? What have been the impacts on major transport schemes, and smaller schemes? Have the full allocations been spent as planned? How have cost increases been settled?

€ Is the formulaic funding approach the most suitable method for allocating transport investment? What has been the impact of the performance-related component?

€ Do local authorities have adequate powers to raise resources to fund local transport infrastructure? What other powers could be useful?

€ Has the balance between revenue funding and capital funding for transport proposals been appropriate? How well have the different funding streams from the Department for Transport and the Office of the Deputy Prime Minister supported local transport projects? Are transport services successful in securing sufficient revenue funding?

€ How efficient is the bidding and scheme preparation stage? What could be done to avoid local authorities wasting significant resources on preparing and designing transport schemes which do not get approval?

In terms of local transport planning:

€ Were the administrative process and timetable for delivering Local Transport Plans appropriate? How helpful was the guidance from the Department for Transport? How did the second round of Local Transport Plans learn from the first, and how could the process be further improved?

€ How well have the Local Transport Plans delivered better access to jobs and services, improved public transport, and reduced problems of congestion, pollution and safety? To what extent has the Government's Transport Strategy fed into the second round Local Transport Plans?

€ How effective is the Local Transport Plan performance management regime? Do the Annual Progress Reports give the necessary transparency and rigour in assessing performance?

€ How successful is the balance between infrastructure projects and travel planning initiatives?

Interested parties are invited to submit written memoranda on the above issues to the Committee before Wednesday 26 April 2006. This inquiry will not focus on bus regulation, as this will be the subject of an inquiry in the near future.

Memoranda should be a maximum of 6 A4 pages in length and should include a summary and a conclusio n. Please submit a single hard copy of your memorandum by post to the above address, and an electronic version, preferably a Word document, by e-mail to or alternatively on a disk with the hard copy. All submissions should be final and complete; the Committee does not accept draft memoranda or subsequent amendments. Memoranda submitted to the Committee should be kept confidential until published by the Committee.

Press Notice 33/2005-06 30 March 2006

Dr John Patterson, Clerk of the Committee

i Local Transport Capital Settlement 2006-07 (for local authorities outside London).

ii Local Government Finance Statistics

iii House of Commons Transport Committee Tenth Report of Session 2004-05 'Integrated Transport: The Future of Light Rail and Modern Trams in the United Kingdom' HC 378-I