Disappointment over the Departments decision to revoke funding for some Major Schemes has raised the profile of the relationship between the Department and local authorities in the context of projects such as light rail. There was severe criticism of the Department's decision to reject schemes which local authorities had judged to comply with national transport strategy and priorities, and present good value for money.
That report echoes some of the criticisms about which we have heard today. The Department for Transports changes to, and delays in, policy have added significantly to the cost of various schemes, and its value-for-money criteria are, at best, opaque. Local authorities have pointed out that they had little idea of what the Department was trying to achieve, of why their light rail schemes had been rejected, and of what they needed to do to get those schemes approved. Many of the targets in the 10-year transport plan that were set out in 2000 have not been achieved, and now the targets have been quietly dropped and are nothing more than aims.
The hon. Member for Crewe and Nantwich said that local transport was a partnership. It is key to vibrant local communities and the lifeblood of local economies. The local transport that is provided in an area can define the area, its community and its economy. Local authorities are responsible for the provision and funding of such transport, but the funding comes from both local and central Governmentthat is the partnership. The interrelation between those two aspects of government defines how effectively transport is delivered. Whatever the Governments plans for the funding of local authority transport, one must hope, in the spirit of partnership, that they are somewhat better, and have more longevity, than the 10-year plan that was produced in 2000.
The Government have talked a lot about devolving power to local authorities, but the harsh reality for many local councils is that the Government are imposing more responsibilities on them without the requisite extra funding. The fact remains that when it comes to transport, local authorities freedom of manoeuvre is woefully inadequate, as authorities are entitled to bid for central Government money for local schemes that meet local priorities only if those local priorities are in accordance with the Department for Transports diktat. That is one of the clear themes that comes through in the Select Committee report.
In 2000, alongside the 10-year plan, the Government introduced a new framework for transport planning by local authorities, the local transport plan, and that is the essence of what the report is considering. The local transport plan imposed on authorities the obligation to produce a local transport plan every five years. The first phase was 2001-02 to 2005-06, and the next round, which is taking place at the moment, is 2006-07 to 2010-11. A notable feature of the local transport plans first round has been the cost associated with the plans production. The Select Committee report cites the
average cost as between £50,000 and £200,000 per county council; in metropolitan areas, the cost is significantly greater.
The report comments that the second round of the local transport plans has continued that trend. The Committee says that the production of Manchesters second-round local transport plan is reckoned to cost some £500,000. One wonders how much that would buy. How many improvements could be made to buses in Manchester town centre or on the Oxford road corridor for that amount? Yet that is just the cost of preparation. The preparation costs for the scheme are at a level that raises questions about the schemes benefits. Are the local transport plan production costs proportionate to the investment secured, or the new transport schemes delivered? I look forward to hearing the Under-Secretary of State for Transport, the hon. Member for Lincoln (Gillian Merron), talk about the proportionality of costs.
In introducing the debate, the hon. Member for Crewe and Nantwich talked about delivery, and the report is scathing on the subject of the delivery of transport improvements. Its conclusion is that little has been delivered, despite the capital investment made. To quote the report,
The gap between what was anticipated and what has been delivered in terms of local transport improvements makes it difficult to judge what has actually been achieved.
on the existing evidence it is disappointing that there were not more transport improvements delivered.
The Governments response to that criticism was to comment that there have been substantial improvements; I am sure that the Minister will expand on that in her speech, but there was no qualification or quantification of the statement. It is instructive to note that the other knee-jerk response, which is to say, Weve put the matter out to consultants, who will issue a report, was used, too. How long will that take, and how much will it cost?
It is clear that the costs of producing local transport plans must have diminished the delivery of improvements. The guidance to local authorities has at times hindered the delivery of those plans, too. On that subject, there is criticism in the report about the guidance, but the Governments guidance is often less than transparent on other occasions as well. I was alerted to that particular feature of the Departments performance last week, in a slightly different context, when I spoke to the councillor responsible for transport for Christchurch borough council. When concessionary bus fares for senior citizens were introduced last yearthe hon. Member for Orkney and Shetland (Mr. Carmichael) mentioned that earlierlocal authorities were warned by the Government that they would have to notify bus operators of the arrangements for reimbursing them four months in advance of the April start date, or they might face action against them. The only trouble was that the Department issued the guidance in mid-January.
We have spoken about first-round costs, but it looks like the second-round plans will incur extra costs, as the Department for Transport has issued revised guidance. Clearly, there has been recognition that the guidance associated with the first-round plans needed
change and revision, but the Departments failure to alert local authorities to the fact that revised guidance was being introduced has undoubtedly caused a number of local authorities extra problems with delivery, and has resulted in extra costs for their bid preparation. The Select Committee report highlights that, and it will be interesting to hear the Ministers response on that point.
The Department believes that the second round of guidance on plan preparation is less prescriptive than the first, but it is the only body that believes that; the view is shared by no one else. The Local Government Association said that the prescriptive nature of the guidance altered the relationship between the Department and councils. The reality is that although the Government provide extra funding through local transport plansI shall come on to that in a momentthey seek, too, to override the local aspect of those plans. They speak about local plans and local action, but they are a centralising Government. It is possible to have a local plan if it fits central Government requirements, and that trait has become even more evident in the transport innovation fund that the Government have introduced.
The Select Committees report rightly makes the point that over-prescription of guidance has increased the costs and production time of local transport plans, without creating any greater certainty about funding, fulfilment, or indeed about delivery. What should a local transport plan comprise? Should it best reflect the needs of the local community and the local authority, or should it recognise the uniqueness of a local area, bearing in mind the fact that areas differ from one another? The answer is yes, but not in the Department for Transport. In 2002, the Department supposedly shared with local authorities priorities such as accessibility, congestion, air quality and road safety. Those are the Departments priorities, because it believes that local authorities are responsible for delivering national transport objectives. If those four priorities reflect the priorities of local authorities, all is well. If they do not, the Government will use them to restrict what local authorities can implement, and much has been made today of the fact that regeneration criteria have been left out of those plans.
The over-prescription and overriding of local priorities is highlighted by the fact that the revised guidance contains 16 pages on shared prioritiesnamely, the Governments prioritiesand only two on other local priorities. Yet again, the Committees report consistently highlights the fact that the Government speak about localising but act by centralising. Local authorities do not believe that they are free to set their own priorities; they believe that local transport plans are scored on how well it delivers national, Department for Transport-set priorities. If local transport plans are to deliver local objectives, the Government must revise their guidance one more time. It must be less prescriptive, and it must ensure that the scoring procedure for the weighting of local priorities against national priorities is transparent. That recommendation is highlighted in the report.
The Governments most recent transport schemethe transport innovation fundalso highlights their centralising nature. It was announced in July 2004, and when it was re-announced in 2006, the Secretary of State announced that it would be available only for
packages aimed at tackling congestion and schemes that met productivity objectives. Yet again, the Government have centrally governed and micro-managed local transport. No one can be in any doubt that transport funding, via the transport innovation fund, is anything other than a national pot of money that carries national obligations for any local authority wishing to access it. My hon. Friend the Member for Reading, East rightly made that point earlier.
is nationally administered and bypasses the strategic frameworks provided by Local Transport Plans and regional transport strategies...it represents a move away from local determination.
The theme continues throughout the report. The Government are not concerned about local priorities. My hon. Friend the Member for Castle Point (Bob Spink) is no longer in the Chamber, but on my visit to Southend, the councillors and officers of Southend borough council told me that they need to access funds for their local transport plan and, indeed, for a number of local transport improvements, but that they have no need for a congestion scheme. However, it is clear to them that if they do not include such a scheme in their TIF bid, they will not receive TIF funding. TIF is not
about local choice or local schemes...It is not about innovation; it is about central control.
The Select Committee makes some interesting points about funding in its report. First, it points out that in 2001-02 to 2005-06 there was an increase in capital funding available for transport. That is to the Governments credit. What is not yet clear is whether the increased capital resources in period 1 will necessarily be renewed into period 2. Paragraph 15 of the Governments response states:
The Government has set planning guidelines for investment in both block funding and major schemes that increase significantly,
but elsewhere the Department states that authorities are encouraged to deliver their second round of local transport plan targets on the assumption that there are no new major projects funded by the Department. On one hand there is the promise of extra funding, and on the other the Government explicitly deny that it is available.
As other hon. Members noted, the Department for Transport indicated that there would be extra capital funds for major schemes. During the first phase of local transport plans, the Government would not fund schemes below £5 million out of the budget, and authorities were not allowed to spend more than £5 million on a scheme without Government approvala point raised by the hon. Member for Manchester, Blackley earlier. That resulted in a number of decisions being taken out of local authority control, where they might more properly have been made. It resulted in local authorities struggling to find funds to enable major schemes, and the limit of £5 million requiring central approval meant significant cost and time to prepare a bid.
I recognise, as does the whole House, that the Department for Transport must ensure that the funding for schemes offers value for money, and that there must necessarily be a robust appraisal, but it is also clear that the bidding process is costly and in a number of cases diminishes the amount of funding available for delivery. The Department has stated that it is necessary for local authorities to undertake an appropriate level of appraisal work. True, but as the Select Committee report highlights the fact that it can cost 5 to 15 per cent. of the total cost of the project just to get a scheme to the stage where it can be presented to the Department for analysis, surely the Minister will agree with everyone else in the House and with the Select Committee report that that is sub-optimal, especially as the report states:
Rejected bids are likely to increase in number.
The process is costly, and it is not clear whether there will be new central funding for major schemes between 2006 and 2011. The Government appear to be indicating that they will consider only major schemes already at provisional approval stage, and have said that it should be assumed that no new major schemes will be funded. That will inevitably undermine the efforts of local authorities to transform and revitalise their local transport networks. Yet again, the Government are talking big but failing to deliver, and talking local but centralising in action.
Let us leave capital funding and move on to revenue funding briefly. Atkins found that the lack of revenue funding was a major barrier to the implementation and maintenance of transport schemes. The Government often speak about local revenue funding of transport to promote social policy objectives, but the shortage is affecting bus and community transport. Last year the concessionary travel scheme for over-60s was introduced in local areas. The Government provided £350 million. When I telephoned 20 local authorities to check whether their allocated funding out of that money would cover the extra cost of the scheme, 19 said no and one was not sure. The £250 million that the Government have announced to implement the national scheme will clearly exacerbate the revenue funding problems for local authorities.
Perhaps we should not worry too much about revenue funding, however, because riding over the horizon to the rescue comes the Lyons inquiry. So far Crossrail, Thameslink and funding for pretty much everything else has been held up while we await Sir Michaels report. Whether it proves to be the universal panacea remains to be seen. The report has taken two and a half years to reach fruition. We have no idea what he is going to recommend on the ability to raise local funds for local projects or what he is going to say about local business taxation for local transport projects. The Lyons report carries the hopes of many, but let us hope it is not an Eddingtonpromising much and delivering little.
The conclusion one must reach if one looks at the Select Committee report and the history of the Government when examining their record on local
transport and funding is that the Department for Transport says that it looks to local authorities to implement local schemes, but in reality it only looks to local authorities if those schemes comply with Government prescription and Government national priorities. Local transport plans are rated against national objectives and stand no chance of receiving funding unless they meet them. The reality is that the Department looks to local authorities to implement national priorities. That was reinforced by the Committees earlier observation:
While the Department insists that councils are free to set their own priorities, this does not match the local authority interpretation of the guidance and assessment for funding.
TIF is even worse. Any local authority can have the temerity to submit a bid based on its local needs, but it will be refused unless it fulfils a narrow set of national priorities. Be it phase 1 or phase 2 of local transport plans or TIF, little about transport planning or funding under this Government is local. The conclusion from the Select Committee report and the conclusion tonight is that this is a Government who talk local but act central.
The Parliamentary Under-Secretary of State for Transport (Gillian Merron): I am pleased that we have debated local transport planning and funding. The subject is vital to achieving the Governments goals for transport. I am grateful to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and her Committee for their work. It has informed us in the Department, as it always does.
I am also pleased that the Select Committee chose to hold an inquiry into local transport planning and funding last year, and I welcome scrutiny of this important policy area. The Committee took evidence from many eminent and expert witnesses, including my hon. Friend the Minister of State. Hon. Members will have to decide for themselves whether he is eminent or expert, or both. I would suggest both.
I welcome the Committees support for the principle of a local transport planning framework. That is clearly within the Committees thoughts. It is a core responsibility of local government. I am pleased that alongside the concerns that the Committee has highlighted, it has also welcomed many of the key recent policy developments, which include introducing a formula to distribute the funding support for local authorities for smaller schemes and changing the arrangements for councils to report progress to the Department. The Committee rightly identified those as necessary.
I want to make some underlying points before addressing the particular points raised. Local transport plans are making a real difference. Substantially larger capital budgets are being spent on local transport. Government funding support has more than doubled compared with a decade ago. The investment has contributed to continued major reductions in serious casualties on local roads and even more rapid falls in the number of those who are seriously injured on our roads. I regard that as progress. That has also reversed the long-term under-investment in road maintenance.
Again, I consider not only halting but reversing the decline in road conditions to be a major advance.
A broader range of projects is being delivered. Measures are being taken locally to manage the use of cars more effectively and to encourage alternative ways of travelling. There is more consultation with stakeholders and the public, which I welcome. More effective schemes are being delivered, and delivery of schemes is being focused on the intended outcomes, a point to which I shall return later. Those are not just my opinions; they are some of the findings of the independent evaluation that the Department has set up in respect of this policy.
I recognise that more needs to be done. The Secretary of State and I have undertaken a review of bus services: in some areas, we found real improvements being achieved in partnership between bus operators and local authorities, but all too often, as hon. Members have mentioned this evening, the current framework is still not delivering the services that passengers rightly expect. In December, we set out proposals in Putting Passengers First to modernise the framework to improve delivery, which was, of course, the biggest shake-up of bus services for 20 years since deregulation by the Conservative party.
The Stern report highlighted the challenge of climate change, which is a key challenge for transport including for local transport planning. Over the past three years, the Department for Transport has worked closely with the Department for Environment, Food and Rural Affairs to foster links between tackling air quality and transport problems locally, which cuts across tiers of councils and across government. The broader issue of climate change is one to which we will apply ourselves even further as we develop local transport planning, and I know that many local authorities welcome that approach.
The Eddington study examined the effects of transport on economic growth, competition and productivity. The local transport plan framework provides a way of considering action on transport locally in the context of wider issues, which the Conservative party has not acknowledged this evening but which we know takes place in reality. The Eddington study highlights buses in urban areas and sub-national decision making as critical delivery areas. We will therefore consider the findings of the study as we develop the local transport planning framework. All those points are responses to studies conducted outside the Department.
Last autumns local government White Paper, which has been referred to this evening, sets out this Governments vision of revitalised local authorities working with partners to reshape public services around members of the public and the communities that they serve. That means changing how the Government work with local authorities, so for local transport planning we are introducing less burdensome reporting to Government and providing more choice for localities to deliver the solutions that are right for their circumstances and priorities. I hope that that has addressed a number of the concerns raised in the House this evening.