Local transport funding
23. The Transport Act 2000 requires most local
transport authorities (county councils, unitary authorities and
partnerships in metropolitan areas) in England (except London)
to produce and maintain a Local Transport Plan (LTP). LTPs set
out the authority's local transport strategies and policies, as
well as an implementation programme. The Department uses LTPs
to, amongst other things, inform decisions on capital funding
for local authorities.
24. LTP capital allocations are made up of three
main funding streams:
- Major scheme
allocations. Local authorities asking for more than £5million
for individual transport schemes must submit full details of those
schemes for individual consideration. These schemes are primarily
for major new local roads (e.g. village or town bypasses) and
public transport projects (e.g. bus route improvements). Decisions
on major schemes are made in the light of regional advice;
- Integrated Transport block
(IT block) allocations. This is used by the local authority to
fund all non-maintenance transport schemes costing less than £5
million - small road projects, road safety schemes, bus priority
schemes, walking and cycling schemes, transport information schemes
etc; and
- Maintenance allocations.
These are provided for structural local road maintenance - major
resurfacing, maintenance or replacement of bridges, tunnels etc,
and occasionally the reinstatement of roads following natural
events or disasters.
Authorities also receive revenue funding for
transport via the wider local government financial settlement.
The main transport element of this is an allocation for routine
highway maintenance. This is allocated on a formula basis taking
into account road length, road condition and other factors.
25. The Department has told us that the capital
provision for local government comes in the form of either a grant
or something which is effectively borrowing permissions, which
is then reflected in the Revenue Support Grant. Authorities which
are at the 'floor' on this arrangement receive only the minimum
grant increases, and so do not receive extra funding for borrowing
allocations. The aim of this arrangement is to ensure that the
funding received by local authorities does not fluctuate significantly
year-on-year, even where the funding formula suggests it should.
Mr Devereux explained:
There is an interaction between the protection
the Government provides to stop reducing grant to local government
where the formula actually suggests they ought to have less, but
that protection then cuts across in the way in which the borrowing
works.[26]
26. A number of local authorities have expressed
concern about the LTP funding arrangements. They claim that because
the funds have been provided as 'supported borrowing' approvals
and not grants, 'floor authorities' will be unable to fund the
additional borrowing.[27]
27. We believe the LTP funding arrangements
are excessively complex and there is a deficiency of publicly
available information from the Department to explain the arrangements
and their implications. We are also concerned that some local
authorities may be unable to fund the additional borrowing necessitated
by these arrangements. We urge the Department to simplify the
system and improve the quality and availability of information
available to local authorities and others.
Performance against the efficiency
targets
28. The Department has three separate efficiency
targets that were set in the Spending Review 2004, which covered
the period 2005-08. We note that the Department achieved financial
efficiency gains of £532 million by the end of 2006 and this
figure rose to £743 million by the end of the second quarter
of the 2007-08 financial year, most of which are cash-releasing
savings.[28] The Department's
target is to achieve £785 million savings by the end of the
2007-08 financial year. We congratulate the Department for
delivering 95% of its Spending Review 2004 financial efficiency
target, and trust that the target will be substantially over-achieved.
We expect to see real improvements in services driven by the resources
released by this achievement, though at present the Efficiency
Technical Note only says that the savings "could" do
so.[29]
29. The Department's headcount reduction target
was to achieve net workforce reductions of 650 between April 2004
and April 2008. By the end of September 2007, a reduction of only
379 had been achieved.[30]
We are very concerned that the Department might fail to achieve
its headcount reduction target. The pace of change does not appear
to be sufficiently rapid. The Department has stated that the
September 2007 headcount figures include a substantial number
of seasonal casual staff who will be removed from the DVLA over
the remainder of the year. It is to be expected that further reductions
may be delivered by the continuing implementation of the Shared
Services Centre agenda.
20 Nichols, Review of Highways Agency's Major Roads
Programme, March 2007 Back
21
Qq 104 & 109 Back
22
Nichols Review, p. ii Back
23
Q105 Back
24
Q111 Back
25
Q113 Back
26
Q206 Back
27
We considered this subject in detail in our Twelfth Report of
2005-06, Local Transport Planning and Funding (HC 1120). Back
28
Department for Transport Autumn Performance Report 2007, Cm 7266,
page 53 Back
29
"Efficiency Programme: technical note", p.3, available
at www.dft.gov.uk/about/how/psa/. Back
30
Department for Transport Autumn Performance Report 2007, Cm 7266,
page 53 Back
