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Gloucester South-West Bypass

1 pm

Mr. Parmjit Dhanda (Gloucester): I am grateful to be granted an Adjournment debate on Gloucester's south-west bypass. The issue has transport, regeneration and economic implications for my constituency, the whole county of Gloucestershire and the south-west region.

For reasons that I shall outline, I seek £17.6 million of Government funding through the local transport plan to support Gloucestershire county council's bid to complete—at long last—the building of the Gloucester south-west bypass. In taking up the cause, I am supported by the South West of England Regional Development Agency, whose chairman, Sir Michael Lickiss, has already written to the Deputy Prime Minister and the Secretary of State for Transport. I am also supported by the regional branch of the CBI, with which I met on Friday, Gloucestershire county council, Gloucester city council and, including me, five Gloucestershire Members of Parliament, encompassing all three major political parties. Such is the urgency of this matter.

I begin with the transport implications of the scheme. The bypass will bring great public transport benefits and improve road safety throughout the area. It will provide a new strategic link from the M5 south of Gloucester to the A417 west of Westgate bridge, and relieve congestion on the existing A430, known as Bristol road. It will create an efficient high-quality public transport corridor through the city and improve the immediate environment of local residents. It will also provide a long-awaited bypass for the local village of Hempsted in my constituency. In addition, it will link up with the Gloucester inner relief road to enable a substantial reduction in traffic and congestion in the centre of Gloucester, bringing environmental benefits, including pedestrianising the Gloucester docks area. Those public transport benefits are much needed in themselves and formed a chief part of the original scheme for the bypass, which was devised in the early 1990s.

However, the bypass does not just relate to transport. More than £500 million of town centre regeneration and development are hanging on the completion of the Gloucester south-west bypass. Sir Michael Lickiss, the RDA chairman, said:

Gloucester's western waterfront is one of the most significant waterfront regeneration projects in the UK, made up of a series of interconnecting development areas that wrap around the western and southern parts of central Gloucester and overlook the canal, the docks, the river and areas of flood plain. The scheme could unlock more than £500 million of public and private investment in jobs, retail, tourism, leisure, housing and education; part of the scheme includes a new further education college in the docks. Part of the key is £17.6 million from the Government when they make the local transport plan announcements in a few weeks.

The potential output of the scheme meets all the Government's targets for brownfield development. Part of the scheme would ensure the regeneration of more

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than 70 hectares of brownfield land. Almost 90 hectares of greenfield land would be protected. More than 2,000 new homes would be created. More than 4,250 m of waterfront would be improved. More than 80 historic buildings would be repaired with the support of English Heritage, which is also a key partner in the developments in the Gloucester docks area. Importantly, there would be a significant reduction in the flood plain with the removal of obstructions when putting the road in place.

Gloucester's schemes tick all the Government's boxes concerning brownfield development. The major development proposals in the area include the St. Oswald's park development, also known as the cattle market site. It is a mixed-use scheme, blending employment, retail, leisure and residential uses. It is valued at more than £100 million and would create a whole new urban quarter for Gloucester on what is at the moment a rather unattractive former landfill site. There are no major objectors to the scheme and, although the Office of the Deputy Prime Minister has called the scheme in, I hope that we shall get the green light this week for the scheme to progress. Part of the difficulty is that the scheme encompasses a £700,000 contribution to the bypass, as do so many private development schemes. Uncertainty over the planning process brings about greater uncertainty in terms of section 106 moneys, on which I shall elaborate in a moment.

Westgate island is another key part of the scheme that would create a new entrance to the city centre from the west and provide a new setting for Gloucester's 900-year-old cathedral for those approaching the city. The docks basin is the key site on the western waterfront because it would provide a link between the waterfront developments and the city centre. The site has recently been bought by the RDA, which demonstrates its commitment to development in the town centre. It would provide a mixed-use development, including housing, in the city centre.

Perhaps the biggest part of the scheme is the Gloucester quays development, which is a mixed-use development, including more than 1,000 homes, a superstore, an hotel, a designer outlet centre and the new Gloscat college of further education, which would be in the docks. The new college in the docks would be alongside the 12th century Llanthony priory, which is now alone and derelict in the docks and could be used as part of a performing arts venue if it were revived alongside the campus with the support of English Heritage. Gloucester quays is valued at well over £200 million and an outline planning application has already been lodged. The key to unlock the development is £17.6 million.

The Government first accepted the bid for the bypass back in 1994 and it was made clear that that acceptance was based on Government expectations of maximising developers' contributions, but therein lies part of the difficulty. The size and scale of the now massive potential development has grown since 1994 and it is now even more in the Government's interests to complete the south-west bypass and unlock that potential. The benefits of the project are not in doubt locally and throughout the country. All local Members of Parliament have signed up in support of the scheme and I believe that the Government accept that there are

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real benefits. What is uncertain is the funding. Gloucester's south-west bypass is an approved road scheme dating back to 1994, but its funding has always relied on securing significant contributions from private sector developers.

The current estimated cost for the whole bypass is £35.3 million. Contributions from developers amounting to £6.2 million have already been secured and £11.5 million of Government funding has previously been approved. That has allowed two sections of the bypass to be built, but those currently stand in isolation and do not offer the benefits that would be provided by the overall improvements. A completed bypass would make a huge difference. The two isolated parts are simply a reminder to the people of Gloucester of what could have been achieved and, perhaps, what still might be.

Original cost estimates presented in 1994 were significantly lower than the £35.3 million figure that is currently being reported. I share what are bound to be the concerns of my hon. Friend and the Department about the escalation of the costs. The speed of progress has been held back by the need to capture developer contributions as schemes led by the private sector have emerged. Indeed, the inflation of construction costs, year by year, has added more than 5 per cent. to the cost of the scheme.

Other factors have led to price increases. Those include the need for enhanced flood protection works and constraints on working due to difficulties with underground gas and oil pipelines. Time slippage and general cost inflation have also had a significant impact on the scheme. In some respects, it is a bit like a game of poker. Let me give my hon. Friend an example; a major potential private sector contribution to the bypass was linked to the development of the former RAF Quedgley, or Eastchurch site, lying to the south of the city of Gloucester. The developer had offered a £6 million contribution to the bypass, subject to its securing planning consent for a mixed-use development that would include a substantial number of houses.

As a result of a planning appeal the development proposals became the subject of a public inquiry. The inspector recommended that the proposals should be approved and that the Government office for the south-west also recommended approval. The Secretary of State, however, issued a minded to refuse letter and requested additional submissions from the parties who were represented at the inquiry. That is not intended as a criticism of the Deputy Prime Minister or his Department, but it is an example of how things can go awry if we expect all the dominos to fall into place. There are, in addition, two issues to deal with: planning, which falls under the remit of the Office of the Deputy Prime Minister, and transport, which is overseen by the Department that my hon. Friend is representing today.

In the interim period, both the timetable and the outcome of the Secretary of State's decision are uncertain and, as time drags on, the costs will inevitably increase. In the Gloucester quays area, other developers see the viability of their project begin to suffer, and Gloscat is left in the dark as to whether the new further education college can go ahead without guarantees about the bypass; and so it goes on. The result is an

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increasing lack of confidence on the part of the developers who are waiting for the road and would, in turn, encourage private development in the city.

My hon. Friend and his Department can remove the confusion and hesitation in one fell swoop by accepting the bid. In this case, it is desirable to break the link between the private sector contributions that are being sought for the bypass and the sensitivities of the planning process. I know that there have been several meetings between the Department for Transport and the city and county councils to discuss the additional funding requirements. It is understandable that Department for Transport officials have been keen to explore whether other private sector contributions might be captured and whether the regional development agency and local authorities might offer more direct support.

The city and county councils, the RDA and local Members of Parliament are confident that all reasonable avenues for support have been exhaustively explored. All the key partners appreciate that the Gloucester south-west bypass needs to be completed within a committed time scale. That is a fundamental precursor to unlocking the full regeneration potential in the city and will have a knock-on effect on jobs and prosperity in the rest of the county and wider region.

The Government have a clear opportunity to resolve the issue with an increase in the local transport plan settlement for Gloucestershire. A sum of £17.6 million will enable us to complete the bypass on budget and on time in 2005. My hon. Friend is a good friend of Gloucester and has been a regular visitor over the years. I hope that he and his Department will accept my arguments and I hope that he will listen to the partners who are involved in this massive scheme. Those partners include the regional CBI, the Learning and Skills Council—which is backing the further education college plan to move to Gloucester docks—Gloscat, the private developers, Gloucester city council, Gloucestershire county council and the South West of England Regional Development Agency.

The partners also include Members of Parliament; my hon. Friends the Members for Stroud (Mr. Drew), who is here today, and for Forest of Dean (Diana Organ), the hon. Members for Cotswold (Mr. Clifton-Brown) and for Cheltenham (Mr. Jones) and myself, the hon. Member for Gloucester. We encompass all political parties. We need this road; it is a road to prosperity and regeneration.

Mr. Deputy Speaker : I call the Minister, who is a regular attender in Westminster Hall.

1.16 pm

The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson) : Thank you, Mr. Deputy Speaker. Sometimes I feel that I am as regular an attender as you.

First, I congratulate my good friend, the hon. Member for Gloucester (Mr. Dhanda), on securing this debate and on the cogent and powerful way in which he has presented his case. At the risk of embarrassing him, it has been good to witness someone who speaks so

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forcibly, volubly and knowledgeably about his area and constituents. I am flattered to be called a friend of Gloucester. If there are friends of Gloucester, it is mainly because of the charm and personality of my hon. Friend.

The Government recognise the importance that the hon. Gentleman places on the completion of the bypass. I recognise his role, both in improving transport in his constituency and in the wider aims that he has set out so clearly. I appreciate that there is strong local support for the scheme.

In the time available, I want to set out what the Government are doing to ensure that local authorities can deliver improved integrated transport in their areas. I will address the specific issues that my hon. Friend has raised on the Gloucester south-west bypass. The Government are committed to sustained, long-term investment to improve local transport. That is a key element of our 10-year plan for transport. We have already made clear the importance that we place on the improvement of local transport provision.

The 1998 White Paper on integrated transport introduced the concept of five-year local transport plans—LTPs—which set transport within our wider objectives for local authorities and within our national framework for integrated transport. In December 2000, we illustrated our commitment to delivering improvement by announcing an £8.4 billion investment package to implement five-year local transport plans across England outside of London.

The local transport capital settlement, which was announced in December 2001, gave details of the second instalment of the funding, with £1.5 billion being made available to authorities in the current financial year. That increased and sustained funding will help to deliver the Government's vision of a high-quality transport network that meets people's needs and offers more choice to individuals, families, communities and businesses.

We have schemes that will help to meet the targets and deliver the outputs that are set out in our 10-year plan. They will reduce the environmental impact of traffic by improving air quality, reducing emissions and noise and reducing congestion in large urban areas. However, the projects are not only to do with infrastructure. We are providing the investment that will allow authorities to deliver a huge range of small-scale integrated transport projects, from local safety schemes, bus priority measures and park-and-ride services, to schemes to encourage cycling and walking.

I have seen at first hand, especially in Gloucester with its go-ahead thinking, what a difference such schemes can make to the safety and well-being of local communities. An especially successful local transport project is the Gloucester safer city project, which has been a major success and is a flagship for the work that a local authority can do when it uses its funding to improve transport in its area.

I referred to the increase in investment in local transport at a national level, but it has been much in evidence in Gloucestershire. We allocated £16.5 million to Gloucestershire county council in 2001–02, and £18.1 million in 2002–03, making more than £34 million in the first two years of its five-year local transport plan. That compares with a total of £16.5

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million in the previous two years, and is more than a doubling of the resources available in Gloucestershire for improvements to transport. It reiterates our commitment to boosting the resources for local authorities to implement five-year plans and provides Gloucestershire with the opportunity greatly to improve its local transport provision.

I am sure that my hon. Friend would agree that the Government are committed to improving local transport. We have provided local authorities with not only the funding to implement the measures in their plans, but the flexibility to determine their own priorities within their local transport allocations. That is in line with the Government's policy on providing local accountability. In giving local authorities in Gloucestershire the extra resources to which I referred, we have also given them the discretion to allocate those resources within their local transport plan. Local people can now make local decisions in accordance with local priorities.

That means that local authorities, like the Government, will have to make choices and sometimes take difficult decisions about where their priorities lie. Greater local discretion may mean that local authorities have to reprioritise their allocations to meet changing demands, such as increases in the costs of individual schemes. That is just a summary of the general points that the Government have made and where we stand with Gloucestershire.

Mr. David Drew (Stroud): I apologise for my lateness, which was due to my complete inability to read the Order Paper correctly. Before my hon. Friend the Minister talks about the south-west bypass, I must emphasise that our problem is that other parts of that bypass have already been completed. That is causing so much inconvenience and stress, and I hope that he will bear that in mind when he talks about how we can find the money for it.

Mr. Jamieson : That is very kind of my hon. Friend the Member for Stroud (Mr. Drew). He may not be able to read the Order Paper, but he has certainly read my speech because he has anticipated some of the points that I was about to make.

On the specific issues of today's debate, the Gloucester south-west bypass has a long history that dates back to the mid-1990s, as my hon. Friend the Member for Gloucester said. The proposal for Government funding was first put forward under the predecessor of the local transport plan system, the transport policies and programmes, or TPP, system.

My hon. Friend very adequately described what the bypass would do and what has been developed so far, and I will not detain the House with another description. The scheme was approved for Government funding in December 1994, and has been receiving financial support through the transport supplementary grant since April 1995. Successive Governments have demonstrated their continuing commitment to that scheme with allocations totalling £11.5 million over the past seven years. Last year, for example, we gave Gloucestershire more than £1.6 million, and £0.8 million in the previous year.

When the scheme was originally accepted for funding, the estimated total cost was £17.7 million, with £5 million provided through developer contributions.

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The original programme completion date was 2000. According to current estimates, the total cost of the scheme has risen to £35.3 million, and the completion date is now about 2005. Any Government would be concerned about such delays in completing the scheme and the substantial increase in projected costs. I am sure that my hon. Friend would agree that we want the benefits from our investment delivered to the travelling public and the local community as quickly as possible. I am sure that that is true locally, for the development of the local economy.

I readily accept my hon. Friend's point that some of the cost increases have been unavoidable and are for additional works that could not have been anticipated when the scheme was first proposed. However, I am sure that he will appreciate that the Government, rightly, cannot provide a blank cheque for every cost overrun on every scheme. We cannot plan effectively on the basis of funding cost overruns that may happen as a matter of course.

Mr. Dhanda : It is worth remembering that £6 million has been secured in developer contributions. My hon. Friend the Under-Secretary has made that point himself. Part of the difficulty is that the scheme dates back to the early 1990s, when the value of the scheme to Government, the county and the region was nothing like as great as it is now. The scheme now has a value of about £500 million, and is annually worth billions of pounds of revenue in jobs and opportunities. I hope that his Department will consider that when it deals with the bid for £17.6 million. It is supported not only by local agencies, which would obviously support it, but the RDA, which has put a significant sum of money—well over £20 million—into the docks area.

Mr. Jamieson : I was not trying to pour cold water on the scheme. My hon. Friend was looking a little concerned, but I was making the strong point that we must have good value for money. The people of Gloucestershire would want that as well in terms of the expenditure. It is for the local authority to make the case for increased funding and to provide adequate assurances that the scheme will be delivered without delay and further additional costs. That would be in his interests and those of Gloucestershire. If the Government unquestioningly met such increases, every pound spent on an overrun on one project would be a pound not spent on another. It could be a pound not spent on another scheme in Gloucester.

I welcome the fact that Gloucestershire county council has made good progress on securing further contributions towards the scheme from private developers that will benefit from it. My officials have been in discussion with officers from the county council on the case for additional funding for the scheme.

My hon. Friend made a coherent and well argued case for the Government to provide additional resources for the bypass to be completed. My ministerial colleagues will carefully consider the case made by the local authority for additional funds. They will assess not only the transport benefits of the scheme at the increased costs, but the points that he made so clearly today. I welcome Gloucestershire county council's agreement in principle to provide funds from its transport budget towards the additional costs, especially as that further

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demonstrates its commitment to the scheme and the recognition of the priority that the council places on its completion.

The local authority has provided my Department with the required additional information to support the case for increased funding. We shall consider it carefully in coming to a decision in December on the level of further Government funding, as part of the local transport capital settlement. I assure my hon. Friend that, in considering the case for further funding, we will be all too aware of the persuasive arguments that he has made today in relation to the vital role of the bypass in the delivery of transport and economic improvements in Gloucester. However, I remind him that sometimes authorities have to make difficult decisions, just as Governments do.

I hope that, in the short time that I have had available, I have been able to convince my hon. Friend the Member for Gloucester that my ministerial colleagues and I are well aware of the case that is being put forward with respect to the Gloucestershire south-west bypass, and that we shall endeavour to reach a decision as soon as is practicable.

Mr. Deputy Speaker : Order. We now move on to the next debate, but, sadly, without a Minister. [Interruption.] The Minister has arrived. I confess I was padding things out a bit.

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