16 August 2012
Campaign for Better Transport today released a report 'Problems with Private Roads' that slams the Government's plans for tolling and privatising the strategic road network.
The Prime Minister and Chancellor have recently floated a wide range of options for attracting private investment into new road-building plans. This includes tolls on new or widened roads, the use of PFI type schemes to avoid the cost being classed as public borrowing and privatisation or semi-privatisation of the Highways Agency and the strategic trunk road network.
Today's report shows that each of the proposals has fatal flaws that mean they can't provide simultaneous benefits for motorists, taxpayers and private investors. New figures from the M6 Toll shows the road lost £41.7m for investors in 2011 as drivers avoided rising toll charges, and analysis of company accounts from the contractor running the A1M near Peterborough has revealed that taxpayers will end up paying more than five times the capital cost of the road in a PFI-style deal.
Instead, campaigners are calling for a complete hiatus on new road projects for the next spending review period, while public money is focused on road maintenance. They are also calling for private investor interest to be channeled towards public transport projects, such as stations, new railway lines and trams.
Problems with the various privatisation options for roads include:
- Toll roads are not bringing in projected revenues in the UK and are politically controversial – the M6 toll road continues to lose millions and to have lower levels of traffic, while in Australia a toll road operator recently went bust and the administrators are suing the traffic forecasters
- “Shadow toll” PFI-style schemes have proved to be incredibly bad value for the taxpayer – proposals put forward for the A14 in Cambridgeshire could cost £3bn more if a PFI approach is used over normal public spending
- Hypothecation of Vehicle Excise Duty to fund a private roads agency would lead to poor or biased funding decisions that did not achieve good value for money – as part of this the Treasury is also considering a flat rate VED which would undermine moves to encourage take up of lower emission vehicles
The report proposes that private funds are best attracted into public transport projects where clear revenue streams avoid the need for complex guarantees or hypothecation of tax revenues. It also calls for a hiatus in road building, with investment focused on maintenance and repair instead. This proposal draws on strong evidence that road improvement and repair projects provide the best value for money from public spending on roads and create more reliable jobs across the whole country, not just in small local areas for short periods of time. Maintenance budgets for trunk and local roads were cut by £672m in 2010 and the Government also reduced specified road condition standards to the absolute legal minimum.
Campaign for Better Transport Chief Executive Stephen Joseph said:
"Our report shows that you don't have to look very hard at the privatisation proposals made by the Government to see that they are astonishingly badly thought through and won't help drivers, taxpayers, investors or the wider economy.
"It's clear that ministers are now casting around for anything that might produce growth without thinking of the long-term consequences or value for money for taxpayers. The proposals risk becoming real mess – a Railtrack for the roads – that will prove just as big a waste of public funds.
“The challenge faced is making sure our existing roads are safer while ensuring public transport provides a better and more convenient service for more people. What’s on offer here may please a few private investors but won’t improve everyday transport.”
Notes for editors
1. The report 'Problems with private roads' can be downloaded at www.bettertransport.org.uk/files/admin/Problems_with_Private_Roads_Final...
2. Prime Minister's speech on national infrastructure, 19 March 2012. http://www.number10.gov.uk/news/pm-speech-on-infrastructure/
3. Campaign for Better Transport is the UK's leading authority on sustainable transport. We champion transport solutions that improve people's lives and reduce environmental damage. Our campaigns push innovative, practical policies at local and national levels. Campaign for Better Transport Charitable Trust is a registered charity (1101929).