Supplementary memorandum submitted by
Hampshire County Council
Thank you for your letter of 20 June. Hampshire
County Council's answers to the questions you have posed are as
follows.
Q1. Direct grants are allocated specifically
for transport in London. Would you like to see revenue for transport
services ring-fenced in the same way for county councils? If grants
were to be ring-fenced for metropolitan transport authorities
how would this affect county councils?
A1. Ring-fencing transport funds would assist
county councils' transport departments in securing a guaranteed
minimum level of funding for transport schemes. However, this
would reduce the flexibility enjoyed by the authority as a whole
to make strategic decisions about funding levels across a number
of service areas. On balance, Hampshire County Council would prefer
that funds were not ring-fenced for any policy area. County Councils
are best placed to make decisions about local needs and spending
priorities.
Q2. Does the authority feel that the LTP
was permitted to concentrate on areas felt to be important locally?
If not, why was there a feeling that the "National Shared
Priorities" were to dominate over other local objectives?
The Department states that the guidance encouraged local authorities
(and partners) to identify local priorities within their LTP—what
more steer did local authorities (and partners) need to develop
local priorities?
A2. The national shared priorities appeared
to be based more on issues that were measurable rather than issues
that were ultimately important. For example, there was a shared
priority on air quality because this can be assessed. But there
was no shared priority on protection of the environment more generally.
Equally, there were no objectives on quality of life, economic
development or asset management. Whilst the LTP guidance allowed
local authorities to specify additional local priorities, many
local authorities were unwilling to make too much use of this
in case the Government gave the LTP a lower assessment score.
For example, the LTP guidance says:
— "3.3 The Department will
look for evidence that the aim of delivering the shared priorities
is at the heart of all local strategies and LTPs ..."
— "3.6 ... The Department encourages
local authorities to focus on explaining the contribution of their
proposals to the transport shared priorities, before describing
how they would deliver any other priorities."
These and other references in the guidance gave
the clear message that local priorities should have a lower order
of priority than the shared priorities.
Hampshire County Council's LTP includes a small
number of local priorities, such as quality of life, economic
development and asset management. The general approach taken was
to incorporate local objectives within the strategies for the
shared objectives. A major example of this is the county council's
approach to accessibility, which includes concepts such as urban
permeability as well as the Government's more narrow definition
of accessibility based on bus timetables.
Q3. We would be grateful for an assessment
of the cost of the interaction between the local authorities and
the central Department for Transport, if this is possible.
A3. For the preparation of the LTP, most
of the County Council's interaction was with the Government Office
for the South East rather than the central Department for Transport.
Interaction with central Department for Transport was limited
to attendance at a handful of seminars and one meeting, plus occasional
telephone calls and emails. It is not possible to estimate costs,
which were relatively low.
Q4. The transport Minister Dr Ladyman stated:
"We can keep it under review, but actually the £5 million
threshold is widely misunderstood. The £5 million is not
the maximum that a local authority can spend: it is the threshold
under which we are unlikely to consider giving additional grant.
If we increased it to £6 million local authorities would
actually be worse off because it would mean that they would have
to have a £6 million scheme before we would consider giving
them additional grant. Local authorities would be better pressuring
us to bring the level down rather than to bring it up." What
is your response to this statement? Have local authorities misunderstood
the issue?
A4. During the first round of Local Transport
Plans, the £5 million threshold represented both the minimum
level for Government financial support and the maximum level that
authorities could spend without Government approval. This created
two distinct problems:
— Smaller authorities found it difficult
to fund schemes that cost close to £5 million, since this
was below the threshold for Government support and often too expensive
for their integrated transport budgets. These authorities generally
welcomed a lower major scheme threshold.
— Larger authorities who could afford
to fund schemes costing more £5 million from their own resources,
could be frustrated by the need to seek Government approval. These
authorities sometimes argued for a higher major scheme threshold.
During the course of the LTP2 process the rules
were changed. Local authorities are now allowed to fund schemes
costing more than £5 million from their own resources. Government
approval is no longer required. Smaller authorities have also
been offered ways of securing funding for schemes costing less
than £5 million.
However, this change in rules is not easy to
find amongst the large number of guidance notes and letters sent
by the Department for Transport. It may have been overlooked by
many authorities. It is not mentioned in the Guidance on full
Local Transport Plans, published in December 2004. The Government's
website on local transport guidance (www.webtag.org.uk) still
carries guidance from April 2004 which continues to suggest that
Government approval is required for schemes costing more than
£5 million:
"schemes promoted by the local authority
and for which Government approval is not required (for example
schemes below the £5 million threshold)".
If there has been misunderstanding by local
authorities about the major scheme threshold it is likely to be
due to the large amount of guidance by the Department of Transport.
Hampshire County Council's view is that the
recent changes to the major scheme thresholds are welcome, but
they should be more clearly explained. The County Council remains
concerned about the cost of bidding for a major scheme and the
unpredictability of Government decisions, such as the decision
not to fund the South Hampshire light rail scheme.
Q5. It has been suggested that whole life
costing, good asset management and strategic transport planning
is not helped by having separate (revenue and capital) funding
streams. CIPFA, the public sector accountancy body, has suggested
that integration could be achieved by supporting capital schemes
through the revenue account, by paying the full cost of depreciation
plus an interest or opportunity cost of using capital. What would
be your view on this?
A5. The separation of revenue and capital
funding streams creates a number of difficulties for local authorities,
because it reduces individual authorities' ability to match expenditure
to local need. Hampshire County Council believes that asset management
has been given insufficient weight in funding allocations. Because
of this, the county council would support proposals to replace
capital allocations with revenue funding.
10 July 2006
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