5 December 2012: Local communities need to be vigilant for a wave of new road building projects springing up as a result of today’s Autumn Statement by the Chancellor.
The statement included a share of £1 billion in funding to bring forward four major road schemes from the Highways Agency – a new A5-M1 link, widening of sections of the A1 between London and Newcastle, dualling of the A30 in Cornwall and widening of the M25 to Thurrock. The money for these projects is to be taken out of spending plans for other Whitehall departments, taking staff and money from welfare, justice and other vital government activities to pay for big roads.
The Chancellor also laid out a range of measures, most already announced, including Infrastructure Guarantees, the Pensions Infrastructure Platform to encourage pension funds to invest in infrastructure and a revamped PFI system called PF2. On these he said: "Taken together this is a revolution in the sources of finance for upgrading Britain’s infrastructure".
Along with the pension funds themselves, in our 'Problems with Private Roads' report earlier this year we were very sceptical about the chances of new roads being attractive projects to pension fund investors even with toll revenue, but with added guarantees the types of projects they are interested in might increase. In the same report we also highlighted the enormously poor value of PFI schemes. The new types of deals would still not be a good long-term way of borrowing money, but could be used by the new Local Transport Bodies being created and led by Local Enterprise Partnerships (LEPs) to fund road projects, not just by the Highways Agency who have been using PFI to fund large road projects for several years.
George Osborne also today promised the unelected LEPs more power and more funding in future, saying: "LEPs, which bring together local leaders and businesses, will be asked by the Government to lead the development of new strategic plans for local growth consistent with national priorities."
Encouraged by the recent Heseltine review of growth and local economies, 'No Stone Unturned', the LEPs will be given further billions in 'growth-related' funding taken from Whitehall departments (the FT reported on this likely measure earlier this week), "by creating a single funding pot for local areas from April 2015". In addition, £350 million was also added to the Regional Growth Fund, through which individual businesses and local authorities can bid for projects, and the Chancellor announced special loan deals for projects sponsored by the LEPs, saying: "The Government will make available a new concessionary public works loan rate to an infrastructure project nominated by each LEP (excluding London), with the total borrowing capped at £1.5 billion."
All in all, the number and direction of these funding announcements should ring loud alarm bells, particularly in relation to the LEPs. What we see time and again is the business groups that lead many of the LEPs pushing for new road-building to support their plans for greenfield housing estates and business parks when these are not what our towns and cities want or need.
This money given to local areas could be sensibly spent on building up skills and creating cheaper more reliable ways of getting around than the car. However, if local communities don't get involved in keeping the developers and big business lobbies within the LEPs in check, they will simply act in their own interests and splash out with this cash on the bypasses and ring roads they want.
This would be a huge mistake: transport planners and local communities have known for decades that large-scale road building and out-of-town developments are an expensive and destructive way of creating more car dependency and more traffic, not a sustainable way of planning for the future.
The full Autumn Statement document gives a summary of new capital funding for roads. This says:
"2.26 Investing in the road network – The Government will invest £1.5 billion, of which £1 billion will be invested in this spending review period to improve the national road network and to accelerate the development and delivery of major road schemes, including:
- £378 million for upgrades to the A1 at Lobley Hill and Leeming to Barton;
- £127 million on a new link between the A5 and M1 and £30 million for dualling the A30 Temple to Carblake;
- £150 million of investment for improvement works to Junction 30 of the M25 starting in 2015; and £10 million on improvements works at Junction 12 of the M40 starting in 2013;
- £270 million for priority national and local projects which will deliver significant improvements on the road network such as removing bottlenecks, enable housing and business developments, and help to provide improved access to Enterprise Zones;
- £333 million for essential maintenance of our national and local road network;
- £95 million to test an accelerated approach to the delivery of major road schemes with 4 pilot schemes; three managed motorways on the M1 Junction 28 to 31, M3 Junction 2 to 4A and M6 Junction 10A to Junction 13; and one conventional scheme A160/A180 Immingham improvement;
- £42 million to develop the pipeline of potential Highways Agency road schemes for investment in the next spending review period;
- £42 million investment in the Sustainable Transport Fund for cycling infrastructure.
"2.27 A5 in Northern Ireland – To support capital investment in Northern Ireland, the Government has agreed to allow the Northern Ireland Executive to defer up to £50 million of borrowing under the Reinvestment and Reform Initiative from 2012-13 to 2014-15. This will facilitate the Northern Ireland Executive’s investment in the project to upgrade the A5.
"2.28 M4 in south Wales – The Government is engaging with the Welsh Government to explore funding options for improving the M4 in south Wales. Funding options are being considered alongside discussions on the recommendations of the Silk Commission and recent announcements on Welsh funding. The Government plans to issue an initial response to the Silk Commission in spring 2013."