The worst challenge is inconsistency in funding (MobilityMatters)

One of the more frustrating things about working in the transport sector is the ever-present issue of funding. But this is not the issue that you may think it is. Most of you probably think that this is a matter of either total amount of funding available or its priorities. Both of these are issues, but they are known issues. In other words, even the worst transport authorities in the world can plan for there being little funding, or all of the funding allocated to roads.

The worst challenge is inconsistency in funding. Effective planning for both maintaining and improving transport infrastructure and services needs long term, consistent funding. The National Infrastructure Commission, in its Second National Infrastructure Assessment, states:

…the current structure and complexity of local government funding does not allow for [authorities to plan for the long term]. There are multiple funding streams that can only be spent on centrally determined priorities, and local authorities often have to bid against each other to access them, preventing long term planning and diverting scarce resources towards putting bids together.

The UK funding system for transport – already highly centralised with local government (whose only two sources of raising funding itself are Council Tax (for which raises to the general fund are capped at 3% without a binding public vote because a former Local Government Minister seemed to hate Councils) and Business Rates) reliant on central government grants for road maintenance and sustainable transport funding – is especially bad. Councils are often expected to react very quickly and bring together detailed costing and business case work to support a funding bid that they are not guaranteed to win.

A case in point – just over 2 years ago I was tasked with pulling together a Levelling Up Fund bid. I will be honest, I knew this bid was not going to succeed. For the bid, a 30 page form was expected to be filled in, with a full business case, against which different types of schemes would be judged on their ability to ‘level up’ areas. To do that level of detail of work within 6 weeks was impossible. But I was told to do so, with people saying that this fund would be judged “more on politics than on substance” and that it was important that “we put a marker down.”

I worked 60 hour weeks for 6 solid weeks to get the application in. It failed. And I am thankful that it failed, because the project was not fully scoped and missed critical details that I warned would put the entire project in jeopardy.

It has recently been reported that 95% of the authorities awarded Levelling Up funding have been unable to spend it, with 43% of £429 million in funding being unspent currently. I am not shocked in the slightest. Not least because of the schemes that was awarded funding near where I live – one of the most affluent areas of the country – has only recently started work.

This experience is symptomatic of a wider problem. Bidding for funding from central government, often at impossible deadlines to deliver schemes at impossible deadlines, aims to to maintain control and ensures that the Minister can get some press with an announcement. The Active Travel Fund, the Pothole Fund, the Traffic Signals Maintenance Scheme, Bus Service Improvement Plans, Zero Emission Bus Regional Areas – all examples of insane bidding processes for what should be routine expenditure for maintaining and upgrading transport infrastructure and services.

Government has been working for many years on devolution deals, to devolve both power and funding away from Whitehall to mostly Combined Authorities. This has had some impact on transport, such as Greater Manchester getting powers to implement a Community Infrastructure Levy, while in West Yorkshire there is a commitment to develop a modern mass-transit system through access to a new five-year integrated transport settlement (among other things). This is better than the current system, but is not consistent across the country, and relies on the good will of the Treasury to approve them.

This aspect of the funding issue cannot be solved by simply throwing more money at the problem or taking money from the likes of National Highways. This is a problem that needs a radical solution. Local councils need the authority to be able to raise local funding for improvements, similar to the Versement mobilité often deployed in France, or even the Business Rate Supplement applied to the construction of the Elizabeth Line. Some authorities are trying to be more proactive within the existing system, such as the Cambridge and Peterborough Combined Authority raising the Mayoral Precept specifically to fund bus services. But this is based on a promise to invest existing funding mechanisms in a certain way, and is not dedicated funding.

A truly meaningful change means empowering local authorities to set their own direction. They need to be given the power to raise the money to do the work, and the powers to be able to enact change, even if that is against the direction of government policy. A new Local Transport Act is needed that gives Councils:

Greater revenue-raising powers when it comes to transport, and more discretion on what schemes can be funded through this revenue;

Mandates that any government funding provided to Councils be for a minimum of 5 years, except in emergencies;

Devolves Bus Service Operator Grant to local authorities;

Gives local transport authorities a general strategic transport power for identifying strategic priorities in their area – though potentially with a general ‘duty to co-operate’ with statutory bodies;

Gives the Mayoral Combined Authorities control over local rail services, similar to London Overground in London;

Reduces the barriers to the delivery of bus franchising.

Read on

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