The state of Transport Investment and funding on 2018

Author: David Tucker, David Tucker Associates

The total transport investment in the UK is currently around £15bn per annum. Expenditure on roads is devolved in Scotland and Wales. HS2 funding is additional.

In broad terms, of the £15bn, some 50% is spent on the Network Rail, 20% on Highways England for motorways and trunk ‘A’ roads and 30% on all other transport including all local roads and local public transport. This compares with a split of usage, measured in passenger kilometres, of 7% by rail, 30% by motorways and trunk roads and 63% on local roads and local public transport.

These figures are further distorted by the method of funding. Highways England’s funding is ring-fenced and allocated to them on a five-year programme. Network Rail has a similar system, although major projects are subject to Department for Transport approval. The emerging Major Roads Network (MRN) will be funded by Government on a scheme by scheme basis.

By contrast, local authorities who generally have to finance all non-strategic transport investment (with possible financial support from their local LEP), are working within an extremely tight budget. Recent experience is that a typical LEP can expect about £15m per annum to spend on transport schemes. In addition, local authorities have to maintain the existing infrastructure and provide revenue support to local public transport. At best a local authority can expect an allocation of limited funds to tackle the many local schemes which are needed to support the local economy. In many cases, this will only cover one or two schemes per annum.

In short, more resource needs to be put into the local transport system. Unless the government increases the total budget this will be in lieu of investment in the strategic network. For the economic wellbeing of the country, we must have a modern transport infrastructure which serves our local communities. The vast majority of trips are less than 10 miles and never use the strategic network. By definition, all personal trips, whether for business or pleasure, all start and finish on the local transport network and many local businesses only use this network. Furthermore, in many small to medium-sized towns, people need a robust public transport system to go about their daily lives but these services are frequently being cut because of lack of revenue support.

If this system continues we will see the ridiculous situation where the strategic network is developed to a high standard but as soon as one steps onto the local network it is of an inadequate standard to cope with today’s traffic volumes, maintenance of roads is poor and public transport is non-existent. This split of expenditure is clearly inequitable and there needs to be greater investment in smaller-scale local transport projects and those that can be delivered quickly. This is particularly vital for small businesses, their staff, customers and suppliers, who require local transport that is reliable and fit for purpose.

A further issue is the excessive cost of many of the larger schemes being promoted by both Network Rail and Highways England. Both organisations seem to have lost the skills of Value Engineering. This is reflected in the recent review by Peter Hendy into the Network Rail’s capital programme. Examples include the need for a targeted electrification programme using Bi-mode trains to deal with areas that are difficult or costly to electrify rather than blanket electrification; concentrating on Operations, Maintenance and Renewals in advance of major enhancements; reviewing design standards for major projects such as HS2 to bring the cost down to that of similar European schemes and fully integrating high speed with improved conventional rail as in Germany.

In the case of Highways England, the Smart Motorway programme is now being progressed on sections which do not have a strong business case compared with investigating in improving the secondary trunk road network to relieve pressure on the primary routes. Good examples are improving the A27/A259, A303 and A46 to relieve M25, M4, M5 and M42. One major improvement scheme at over £1bn could buy over 200 local transport schemes!

In effect, for the economic good of the country, and especially small business, we need more, smaller local schemes even if this is at the expense of some improvements to an already comprehensive strategic network. Nationally we need to concentrate investment in the local transport network and indeed to ensure an equitable share of funding across the whole population, even at the expense of some major projects.