Interviews

Cash flows

The way in which local rail and light rail schemes get funding could change comprehensively under Government plans. RTM gets a view from Jonathan Bray, director of the Support Unit at the Passenger Transport Executive Group (pteg).

The DfT consultation on devolving local about transport schemes, and also are the major transport schemes, launched at the end of January, and intended to come into effect from 2015, is aimed at handing more decision-making and spending power to local groups and especially to businesses who care about transport infrastructure, while also reducing the bureaucracy involved in delivering transport schemes costing over £5m.

This could have a real impact on the way new station schemes and light rail projects outside London are considered.

The DfT intends to drop the current centrally managed ‘bidding’ process for such schemes, and instead devolve the money using a population-based formula, focused on the new Local Enterprise Partnerships (LEPs).

The previous process – centrally-managed regional funding allocations – has been labelled “autocratic” by Transport Secretary Justine Greening. Announcing the consultation, she said: “We now have the opportunity of developing a new system for beyond 2015. A system which ensures that the best outcomes are achieved for the economy whilst balancing the need for developing sustainably and reducing carbon emissions; a system which hands real power to local communities; and a system which is fit for purpose in practical delivery terms.”

She added: “In return for greater devolution, central Government will need assurances on effective governance, financial management, accountability and the achievement of value for money – matters which businesses and local authorities do every day.”

‘Local transport bodies’ – which will be set up according to local wishes, generally covering the same geographic area as LEPs – will agree and prioritise schemes, oversee their delivery and evaluate their impacts, but will not actually deliver the schemes: this will be left up to Network Rail and local authorities, as now.

Jonathan Bray, director of the Passenger Transport Executive Group (pteg) Support Unit, told RTM: “We support more devolution of funding and powers, because these decisions are best taken in the areas that are affected, rather than Whitehall. So the principle is welcome.

“But the challenge is in making it work effectively in the case of major local schemes, especially larger schemes. The DfT is proposing that money will be parcelled up and devolved down to either LEPs or ‘transport bodies’ made up of one or more LEPs. That could be quite a lot of relatively small packets being devolved down, whereas if you want to build a tram scheme in a city, for example, that’s quite a large capital commitment over a period of time, so there will be some issues there around pooling of funding for larger schemes.

“The second major challenge is governance, which is getting quite crowded now, particularly in our PTE areas, the metropolitan areas, where you have a PTE, an ITA, district councils, one or more district mayors potentially, one or more LEPs, and potentially a transport body. Within that, LEPs are quite variable in terms of the extent to which they’ve focused on transport so far, and their formal structures, because they’re not creatures of statute. ‘Transport body’ too is rather ill-defined in the consultation; it’s very unlikely to have any statutory basis.”

But he noted that when funding is attached to something, people tend to find a way to make things work, but said the potential conflicts between the various levels and types of local governance involved in transport could create future problems.

He added: “I’m not saying any of this is insuperable, and I’m not trying to knock the principle of what the Government is doing. It’s broadly positive. The principle of devolution is right. But there are challenges around the pooling for big schemes, and also the various bodies that are now involved in the devolution agenda, particularly in city regions.”

The passenger transport executives have been working closely with the new LEPs, he said, since their inception: “Many of the LEPs do map onto PTE areas. We have the expertise and like to think we’ve an excellent track record of successfully bringing about transport schemes, and also are the right size in terms of both economic footprint and rail networks, therefore we’ve been working closely with these new entities as they emerge. I would imagine that will continue, particularly as there’s no real appetite for creating new offices, new organisations, new sets of people: we’re already here.

“We’re working on the assumption that the PTEs would be continuing to lead on rail and light rail, because it would be fairly pointless just to transfer a whole load of officers over to a LEP, especially when one of the big ideas of LEPs is you don’t want to recreate something that looks and feels a bit like a regional development agency but on a different level.

“The funding situation is in flux, but one of the most interesting things at the moment is the focus on cities, coming from Greg Clark MP and high levels of the Government. They’re also talking about a lot more financial freedom, tax increment financing, localised business rates, and there’s no doubt more to come. Devolution will only gain as we go on – goodness knows what we may be looking at in the future.”

Aside from station schemes, the other major rail projects that such bodies are likely to be involved in are light rail projects. The better outlook for trams at the moment combined with reformed funding arrangements could offer a boost for cities looking at implementing their own tram networks, Bray suggested.

He said: “Trams tend to be on a bit of a rollercoaster in terms of whether they’re in or out of favour, but they have been having a bit of a recovery lately. Greater Manchester is a real network, something we haven’t really seen before.

“It’s not just a couple of lines, it’s a proper network, and I think that will give tram services a shot in the arm. Centro’s Midland Metro is moving forward, Nottingham is moving forward. Edinburgh is hanging over all of this slightly, but it’s a one-off, in the way it’s been comprehensively messed up, and it doesn’t seem to be infecting the reputation of the others.

“I think the tram is back, and is credible.”

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