Annex E
SUPPLEMENTARY INFORMATION ON GROWTH AREAS
INFRASTRUCTURE
There have been a number of studies and assessments
into the Growth Areas, some of which have included proposed costs
for infrastructure. For example, consultants Roger Tym & Partners
estimated in the MKSM Study (September 2002) that the total cost
of infrastructure in the Milton Keynes South Midlands Growth Area,
from both public and private sectors, would be c£8.3 billion.
Such figures are useful tools in highlighting
the potential scale of funding that will be required but will
inevitably be subject to major revision when more detailed local
planning gets underway, both to the layout of development and
to prioritisation. Local partners, investors and developers need
to agree what infrastructure is needed and/or desirable for growth
and is additional to infrastructure that will in any case be needed
in the ordinary course without growth.
We are encouraging our local delivery partners
to focus on identifying, prioritising and sourcing investment
in their areas—based on their individual circumstances and
priorities. This approach is being taken forward in Milton Keynes
and is being developed in other growth location business plans.
For example, Milton Keynes Partnerships (MKP—the
local delivery vehicle in Milton Keynes, part of English Partnerships)
has developed a "prospectus" identifying and costing
the local (eg schools) and strategic (eg roads) infrastructure.
They have estimated that the infrastructure required until 2016
to accommodate 15,000 new homes in the expansion areas of Milton
Keynes will cost a total c£1.2 billion. MKP has negotiated
with the developers a total S106 contribution of around £300
million—around £18,500 per house, and inclusive of
contributions for commercial space. In addition, developers will
also contribute land for social infrastructure and will make available
affordable housing in accordance with local policy. The remaining
c£900 million would be sought through Government funding
(subject, in some cases, to decisions by the council as to how
much funding to direct towards meeting the needs of growth versus
other demands for capital expenditure). Much, but not all, of
this funding is already in process via mainstream funding channels,
eg Highways Agency programmes.
We very much welcome this initiative and approve
the overall approach underpinning the framework. We will offer
support to other local delivery partners working on similar proposals
for their growth locations.
Clearly there are limitations in how and when
funding levels can be agreed in each location. For example, in
proposed key growth locations where local distribution of development
has yet to be agreed, such as Luton and Harlow, it is not possible,
or realistic, to have a list of agreed infrastructure requirements
or costs in place prior to large scale development decisions being
made. In addition, local and regional partners have been given
strengthened roles in setting and deciding the strategic and funding
priorities for their respective areas and this will affect future
funding.
Similarly Government commitments need to take
into account:
— The Government does not set expenditure
decisions over a 15-30 year timescale.
— Government spending decisions on
some services will not necessarily reflect the administrative
boundaries of the Growth Areas (eg education funding).
— The distinction between capital and
revenue is not always clear-cut (eg where revenue funding is used
to meet capital expenditure on PFI projects).
— The distinction between "growth-related"
infrastructure spending and general spending on infrastructure
is seldom clear-cut.
— In a number of cases (eg transport)
allocation of funding will be subject to the priorities of regional
partners or bid-based.
— Finally, a significant proportion
of the infrastructure will be built either directly by the private
sector (eg utilities) or with developer funding via S106 contributions.
However, Government is working to ensure that
mainstream programmes are responsive to the growth agenda. ODPM
is working closely with other Government Departments to ensure
that planned investment in transport, schools, hospitals, green
infrastructure and other facilities supports new housing in the
Growth Areas. Good progress has been made but it is important
that this continues in the future as the plans for the growth
areas develop. Some examples of this progress include:
— We have negotiated several recent
improvements to enable that "people driven services",
such as education and health, respond to population growth. For
example, the Department of Health have included a Growth Area
Adjustment to revenue allocations for PCTs in the Growth Areas.
Amongst other factors, this has led to the PCTs in the Growth
Areas receiving funding increases of £860 million in 2006-07
and £970 million in 2007-08—an increase over the two
years of 20.8% compared to a national average of 19.5%.
— We are recognising the pressures
on local authorities of rapid growth. The Local Government Finance
Settlement for 2005-06 has abolished grant ceilings. Also, as
part of the three-year settlement process ODPM are also considering
the use of forward looking population data, which will be beneficial
to Local Authorities experiencing significant levels of growth.
— Continued high levels of mainstream
investment in infrastructure—for example, c£3.5 billion
is committed or planned by Department for Transport for infrastructure
schemes in the four Growth Areas.
— SR04 additional ODPM funding for
the Growth Areas—now totalling c£1.25 billion from
2003-04 to 2007-08 to support local and community infrastructure
and regeneration projects within the four areas.
— Around £850 million of this
funding is to be allocated to regeneration projects in the Thames
Gateway. Over £500 million of this has already been approved
in principle to a range of projects, in the three sub-regions:
THAMES GATEWAY PROGRAMME—ANNUAL SUMMARY
|
2003-04
Actual
Expenditure
| 2004-05
Actual
Expenditure
| 2005-06
Forecast
| 2006-07
Forecast
| 2007-08
Forecast
|
|
| £41 million | £168 million
| £191 million | £213 million
| £216 million |
|
Please note that these figures are current forecasts and remain
subject to change
COMMITTED/APPROVED IN PRINCIPLE FUNDING—SPLIT BY AREA
— Essex—£89 million
— London—£226 million
— Kent—£210 million
COMMITTED/APPROVED IN PRINCIPLE FUNDING—SPLIT BY TYPE OF
PROJECT
|
| Masterplanning and delivery vehicles | £25 million
|
| Land purchase and remediation | £199 million
|
| Employment | £22 million
|
| Housing | £72 million
|
| Environment | £28 million
|
| Town Centres | £27 million
|
| Education | £55 million
|
| Liveability | £15 million
|
| Transport | £72 million
|
| Utilities | £10 million
|
| TOTAL | £525 million
|
|
Please note that these figures do not include administration expenditure
— The remaining c£400 million of ODPM
funding is to be allocated to support the objectives of sustainable
development in the three newer growth areas. Below is the split
of this funding profiled to be spent in each of the three areas
to 2005-06:
NEWER GROWTH AREAS PROGRAMME
|
| 2003-04
| 2004-05 | 2005-06
|
| Actual Expenditure
| Actual Expenditure | Forecast
|
|
| MKSM | £11.7 million
| £25.2 million | £62.4 million
|
| LSCP | £9.4 million
| £20.0 million | £33.0 million
|
| Ashford | £1.2 million
| £15.7 million | £9.8 million
|
|
Please note that figures for 2005-06 are current forecasts and
remain subject to change. Also, as the bidding process is currently
underway for funding for 2006-07 and 2007-08 we are unable to
provide an area split for these years.
— A new £200 million Community Infrastructure
Fund has been set-up to support transport infrastructure projects
linked to housing growth between 2006-07 and 2007-08. This Fund
is held within the Department for Transport's budget but is being
jointly administered by ODPM. A final allocation has not yet been
decided but schemes were provisionally approved in March 2005
and have now submitted further, detailed appraisals. Based on
the split of Expressions of Interest announcements, the CIF funding
split of schemes being taken forward by Growth Area are as follows
(but note that some may fall away as a result of the detailed
appraisals):
— Thames Gateway—£57.4 million*
— MKSM—£94.4 million
— LSCP—£39 million
— Ashford—£7.7 million
* Please note that this is in addition to £34 million allocated
from CIF for two bus transit schemes in the London Thames Gateway
area, announced in November 2004.
| 
