Large local transport plan major schemes outside growth or regeneration areas are set to be scuppered by Whitehall’s proposed requirement for a 10% local contribution.
Senior county officials are to tell the Government that, while the obligation would not pose a problem to councils progressing schemes which can draw on section 106 agreements or regeneration funding, elsewhere, councils would be hard-pressed to find the necessary money.
The Department for Transport  proposed – in a surprise move last week – that a 10% contribution would, in future, be required for all major schemes. It was ‘reasonable and desirable for all councils to contribute something’, providing an additional incentive for authorities to combat cost overruns (Surveyor, 6 April).
The preparatory costs of schemes would count towards the 10% local contribution. The new obligation follows the more onerous requirement for local transport and highway authorities to pay for one-quarter of the cost of light rail schemes. The consultation paper also outlines how councils will need to pay half of the first 10% of cost overruns falling within ‘an additional risk layer’, but 100% above that.
Senior county officials said councils were, in many cases, paying at least 10% anyway, with, for instance, the tab for preparatory costs not always picked up by the DfT. But councils progressing rural bypasses with double-digit million-price tags not related to development would have few options, Surveyor was told this week.
‘If we’ve got to fund 10% of a £50M scheme, say, I’m not sure where that money is going to come from, unless there’s some form of planning gain,’ said ~Leicestershire~ director and County Surveyors’ Society  highways management chair, ~Matthew Lugg~ ‘Are we going to have to use our precious LTP2 allocations?’ he asked.
The former ~Cambridgeshire~ official said it was only realistic for an authority in a housing growth area to come up with that kind of money for a significantly-sized scheme. ‘I can see why they’re doing it, but if you’ve got a rural bypass that’s not linked to new housing or a regeneration project, then you’re going to struggle.’
There was no rationale behind making it more difficult for projects meeting good transport objectives without other funding sources to go ahead.
~Graeme Fitton~ chair of the CSS finance committee, who will be co-ordinating the consultation response to the DfT, said that while the proposal had ‘come out of the blue’, it was not entirely new. The DfT had, with increasing frequency, insisted that the inflation costs for schemes many years in development were shared between the town hall and Whitehall.
He said some councils would be fairly relaxed about the idea, and that 90% of grant-funding was better than schemes being funded by 50% grant and 50% supported borrowing.
But the proposal would make it more difficult for some councils to get schemes built, particularly for small unitaries, councils steering more expensive schemes, and those outside growth areas.
The more protracted approvals process was a greater deterrent to bringing forward schemes, given the fact that this, in itself, would force up costs – and an authority’s contribution.