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Local Transport Capital Settlement 2007-08

The Secretary of State for Transport (Mr. Douglas Alexander): Today I am announcing a package of funding of £3 billion to improve local transport outside London. It builds on last year’s settlement of £1.6 billion to ensure that 122 local transport authorities, including the six Passenger Transport Authorities are allocated a total of £8 billion over the five years of the local transport plan period.

This capital funding is in addition to the £3 billion made available in regional funding allocations for local authority major schemes and Highways Agency schemes of regional significance over the next four years.

This is the first local transport settlement since local authorities reviewed the delivery of their first five-year plans and produced the final versions of their second five-year local transport plans.

I would like to take this opportunity to congratulate local authorities on their good performance over the course of the first five-year plans. I have been very impressed with the improvement in delivery of transport services during this period. There has been sustained progress, for example, in reducing local road casualties and in the condition of many local roads. Authorities have made substantial investment to manage traffic more effectively and reduce its adverse impacts on residents, town centres and the environment more generally. In many areas, better infrastructure for buses, cyclists and pedestrians has been put in place and transport is making a contribution to more sustainable development and economic growth. Examples of local authority achievement throughout the country are highlighted in a recent report by Atkins which has been placed in the Libraries of both Houses, and is also available at:

Local authorities have also taken the opportunity to make substantial improvements in the quality of the provisional plans submitted last year. Twenty-one authorities have been assessed as having produced excellent plans. Today’s announcement clearly demonstrates our commitment to building upon the successes already achieved.

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Alongside this year’s settlement we have also issued financial planning guidelines for a specific road safety grant set up as part of the move to integrate safety cameras into the wider road safety delivery process from 1 April 2007. This funding represents a long-term commitment to fund further improvements in road safety and provides local authorities and their partners with the flexibility to implement a locally agreed mix of road safety measures that will deliver the greatest reductions in road casualties in their area.

Details of the 2007-08 allocations and assessments made of authorities’ performance and a report on the delivery of the first local transport plans have been placed in the Libraries of both Houses, and are also available at:

Rail Franchise

The Secretary of State for Transport (Mr. Douglas Alexander): The Department announced last week that it has started a competition to find an operator to run train services on the inter-city east coast main line from London to the north-east and Scotland.

We expect a new operator will be in place in 12 to 18 months’ time. Until that date it has been agreed that the current operator, Great North Eastern Railway (GNER) will operate the franchise on the Department’s behalf under a temporary management contract.

The agreement, which was announced to the stock exchange on 15 December, is backdated to the 10 December 2006, the start of the current railway accounting period.

Under this temporary contract, GNER will continue to deliver train services and will help ensure a smooth transition to the winner of the franchise competition.

Most of the net worth of the company passed to the Government and in addition, GNER will cover the Department’s costs of re-letting the franchise early. DfT has set GNER a challenging but achievable revenue target to incentivise a growth in the value of the franchise. If GNER beats this target, it will earn a share of that success.

For passengers and staff the new contract will mean that services will operate as normal. All tickets are valid and passengers can continue to book and reserve seats in exactly the same way as today.

This is in line with our intention in the rail White Paper of July 2004, that if an operator falls into financial difficulty it should expect to surrender the franchise. To renegotiate a contract would set a precedent that we are willing to bail out operators at extra cost to the taxpayer.

Companies interested in operating the services in the future are being asked for expressions of interest. My Department is also consulting on the specification for the new franchise. Copies of that consultation have been placed in the House Library. It proposes that the current service levels are maintained and the additional Leeds half-hourly services are included.

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By ending the franchise early and putting this management contract in place we are protecting the interests of taxpayers, passengers and staff. It will ensure services continue to operate as normal.

Transport Innovation Fund (Productivity)

The Secretary of State for Transport (Mr. Douglas Alexander): In June, I announced that the first schemes to be considered for funding from the productivity strand of the transport innovation fund fell into two priority themes which fitted with the key objective of supporting national productivity.

We considered a number of strategic rail freight schemes which could improve the capacity and resilience of the strategic national freight distribution network. We also considered several strategic road network schemes involving improved traffic management techniques which could help to make the most of capacity at key pressure points.

I am pleased to confirm that after initial scrutiny a number of these schemes have shown that they have strong potential to provide a significant benefit to national productivity and to demonstrate high value for money. These schemes would all fit well with Rod Eddington’s recommendations to address the constraints of our congested and growing city catchments, key inter-urban corridors and international gateways.

My Department will now be working with Network Rail to take forward work on the detailed case for TIP funding for the following rail freight schemes: the reinstatement of Olive Mount Chord at Liverpool (including Chat Moss), the Humber ports/Immingham rail capacity enhancement, gauge and capacity enhancements from Peterborough to Nuneaton, and gauge enhancements from Southampton to the west coast mainline near Birmingham. The Under-Secretary for Transport, My hon. Friend the Member for Glasgow, South (Mr. Harris) has similarly agreed that work should be taken forward on the Gospel Oak to Barking line scheme, in which I have an interest. Particularly if some or all of these schemes were taken forward together, they would greatly enhance the capacity of the railway to move modern, larger containers that would otherwise have to move by road.

We will work with the Highways Agency to develop the case for TIP funding for the traffic management schemes on the Birmingham Motorway Box and the M62 (Leeds Bradford). We will also be asking the Highways Agency to do further work on the A14 traffic management scheme.

Consideration of TIP funding for some of these schemes will be dependent on confirmation of funding contributions from regional bodies and private sector beneficiaries. We will be making final decisions on the allocation of funding as these schemes develop and in the light of my Department’s detailed investment appraisal and business case scrutiny process.

There were three other prospective schemes, the Al, Ml, M1l Resilience, the Teesport /east coast main line rail gauge enhancement, and A14 widening (Ellington to Fen Ditton) scheme.

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No clear proposals were put forward for the A1, Ml, Ml1 scheme and therefore it has not been taken through to the next stage of consideration. The A14 Ellington to Fen Ditton scheme is subject to further consultation and it would, therefore, be inappropriate for us to pre-judge the outcome at this point. However, we do recognise the need to deliver this scheme as quickly as possible, subject to the outcome of the necessary consultation and statutory procedures.

The Teesport/east coast main line rail gauge enhancement scheme fitted well with our strategic approach, but the scheme was not sufficiently developed to enable an
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accurate appraisal to take place. Network Rail have, however, been working with the Northern Way and other stakeholders to develop a wider Northern “W10 gauge” strategy for routes to markets for the major northern ports, in which Teesport would be a key element. We look forward to seeing the outcome of this work.

Decisions have not yet been taken on the future criteria or method for allocating Productivity TIP resources, but, subject to meeting the criteria, these schemes would be eligible and will be considered for future rounds of TIP funding.

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