Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 400 - 419)



  400.  And so what is the percentage then; that is the 1 per cent to local government, is it?
  (Mr Brearley)  I was saying, the £114 million PFI payments for the DBFO road schemes is about 1 per cent of the DETR budget.

  401.  Who decides which programmes go ahead and which programmes are put on hold, in the schemes, is it the Ministers, is it your Department, or is it the Highways Agency?
  (Mr Brearley)  You are talking road schemes here?

  402.  Yes.
  (Mr Brearley)  Ministers will decide what the programme is to be and what schemes go ahead and what do not.

  403.  The Ministry decides?
  (Mr Brearley)  The Ministers, yes.

  404.  And of the schemes that have been considered over the past few years, as submitted by the Highways Agency, what would be the percentage then that the Ministry have said that they do not think should go ahead?
  (Mr Brearley)  I do not think I can give you a precise answer to that question. As you know, this Government, since arriving, first of all had an accelerated review, as it was called, of schemes which were, so to speak, ready to go, a year ago, and took some decisions—there were 12 of these schemes, I think—about them, and the remainder of the schemes in the pipeline, of which in very round numbers there are about 150, have been under review during the last year, and Ministers intend to publish the result of the roads review soon after the Transport White Paper, which is, in turn, coming out shortly.

  405.  Would it be possible to let the Committee have a breakdown as to the schemes that have been put on hold, as decided by the Government since 1 May?
  (Mr Brearley)  We can certainly let you have the list of schemes which are under review, and indeed those which Ministers approved last year in the accelerated review, and, as I say, shortly, soon, they will be announcing their decisions on the remainder.

Chairman:  I think, some day, we are going to come back to you for a whole lexicon on the definitions of "shortly".

Mr Bennett

  406.  On the money you have just referred to, as far as bridges are concerned, is that simply repair, or is that in anticipation of axle weights?
  (Mr Brearley)  It is in anticipation of axle weights, that is to say, it is to do with the 40-tonne lorries, which our derogation expires on quite soon.

  407.  So the whole of that sum is actually for that, bridges?
  (Mr Brearley)  No, it includes maintenance as well.

  408.  How much then for the derogation?
  (Mr Brearley)  I am sorry that I have not got that figure with me; we can let you have something afterwards, I guess.

Mr Stringer

  409.  You mentioned the accelerated review of the roads scheme, and I gather there was a time when six business schemes were allowed through, does the Department have an estimated cost for that review?
  (Mr Brearley)  Do you mean the internal cost of it, as it were?

Mr Stringer:  No, the cost, any additional cost to contracts because some are delayed, and that is later, have you looked at whether there was a cost to that review or not?


  410.  Are these contracts which have not been signed that have been put on hold; this is the truth, is it not?
  (Mr Brearley)  None of the schemes, I think I am right in saying, had arrived at contract stage, we were not in that situation, and these were schemes which, for the most part, had passed their statutory procedures and were waiting to be passed.

Mr Stringer

  411.  The official blessings on some of the contracts were delayed, as I understand it?
  (Mr Brearley)  I think that may well be true.

  412.  And, normally, when that happens, unless there is a huge downturn in the market, or a downturn in the market, there will be a cost to it; have you estimated what the cost will be, costs, rather?
  (Mr Brearley)  I do not know of a cost, but we will ask the Highways Agency, may we, and let you know.

Mr O'Brien

  413.  In the programme of reviewing the new structures of road extension, has there been consideration given to making more efficient use of the existing network so as to prevent new capital development?
  (Mr Brearley)  Very much so. This has been one of the things that the wider roads review, not simply the review of individual schemes but the whole approach to the national road programme, has been looking at, and the Highways Agency have brought out a set of Instruments which they call their "toolkit", which might, in principle, be deployed in particular situations, and this is ramp metering, or the reservation of lanes to particular types of vehicle, improved methods of signing, integration with `park and ride' facilities, and so on, a whole set of things of that kind which they have been looking at. And the roads review report will obviously set out, when it comes out, what Ministers think about this and the place it has in the arrangements.

  414.  Who would be the best people to explain that to the Committee, would it be the Ministers or the Highways Agency?
  (Mr Brearley)  Actually, what can be done and how, the Highways Agency would be the people.

Mr Stevenson:  Could I return to road maintenance, please, and specifically the funding of local authorities. Earlier on, you were saying that principal and local authority roads had suffered from underfunding and had, in cash terms but not in real terms, returned their value. Of course, the system is payments through the TPP system and Transport Supplementary Grants, and so on. One of the things that has happened over recent years is that the relationship between grants, through that system, to local authorities, and Supplementary Credit Approvals, of course, has changed somewhat, I think. As I understand Supplementary Credit Approvals, it is really authority for a local authority to borrow, and they would be responsible for—could you give us some idea of the relationship between grants and Supplementary Credit Approvals——

Chairman:  Order. I am sorry, I am afraid the Committee must be suspended for, I will say for ten minutes. I hope Members will try to get back in that time. The Chairman, I must point out, is the Chairman of the Finance Committee and is therefore paired.

The Committee suspended from 4.44 pm to 4.48 pm for a division in the House

Chairman:  Gentlemen. Mr Stevenson.

Mr Stevenson

  415.  Did you get the question, the relationship between grants and Supplementary Credit Approvals?
  (Mr Brearley)  If an authority has credit approval then, as you say, it borrows the money and has to pay it back. The actual loan servicing, the cost of the interest and of repayment of the loan over time, is covered by Revenue Support Grant, by an element in Revenue Support Grant, and an authority will get a little bit more Revenue Support Grant because it has this credit approval and raises the loan than if it did not.

  416.  Would you agree with the proposition, therefore, even taking into account the mechanisms which you have just described, this change from total grants, as the situation used to be, to one of a mixture of grants and Supplementary Credit Approvals has, in fact, transferred expenditure responsibility onto local authorities, to some degree?
  (Mr Brearley)  It has certainly transferred a responsibility, the Revenue Support Grant system is intended to compensate authorities fully for the actual cost.

  417.  Could you comment, quickly, on my original point, which was, have you any idea about the relationship, the proportions, of grant and SCAs in, let us say, the latest, the last TPP settlements?
  (Mr Brearley)  I can do my best. There are some figures in Chapter 9. Perhaps we could let you have a note. But can I just add that, apart from capital maintenance, which is provided for through TSG and credit approvals, local authorities spend about £1.8 billion, I am quoting from the Report here, out of their current expenditure on road maintenance as well, and that is, in fact, much the larger sum.

  418.  Very quickly, Mrs Dunwoody, we hear that there may be proposals to change the annual settlement through the TPP, which is pretty problematical, I think, for local authorities, to a longer-term settlement, three years, perhaps, the Chancellor gives us some ideas, or perhaps longer. Is this being considered by the Department, and, if so, what are your views about that?
  (Mr Ballard)  It is being considered. We have the benefit, through the Chancellor's statement the other day, of having three-year spending limits for the Department, as a block, and, obviously, what we are wanting to do is to carry through as much of that forward commitment as we can to others who rely on funding from the Department, while, obviously, retaining sufficient flexibility to manage the block. Because it is clear that Departments will have to manage within the resources that they are given for that three-year period, and the ability to go the centre, the central reserve, will be much diminished under the Chancellor's proposals, so we must have the ability to manage.

Mr Pickles

  419.  So you will be able to treat the whole three years as one unit, there would not be a question of having to spend up or to exhaust budgetary heads at the end of one year, you would be able to look towards your expenditure, maybe wedge your expenditure, maybe phase your expenditure, would that be right?
  (Mr Ballard)  Not entirely. Under the proposals to be published, there will be totals for each year, these will be spending limits for each year, but what Departments will have is flexibility to carry forward expenditure from, let us say, 1999-2000 to 2001, so if they underspend in one year they can carry forward expenditure. What they will not be able to do is to bring expenditure from 2000-2001 into 1999-2000, they cannot bring it that way.

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