Overview

On July 5th 2017 the Government launched its Transport Investment Strategy for the UK, setting out its approach for future transport investment decisions, and framing its priorities across the sector as we head towards Brexit.

Key features include:

  • A proposed National Roads Fund that will be funded via Vehicle Excise Duty (VED);
  • £15 billion of investment into motorways and major trunk roads;
  • Continued support for the devolution of Network Rail and closer working between train; operators and Network Rail (per the McNulty recommendations);
  • Using transport investment to support housing development; and
  • Continued funding for technology, innovation and research to position the UK as a global leader in transport technology, including in electric vehicles and connected and autonomous vehicles.

Transport and Infrastructure:

Roads:

From 2020/21 the Government has guaranteed that all revenue raised from VED in England will be allocated to a new National Roads Fund. This will then be invested directly back into the road network as a source of stable funding that will allow the Government to maintain levels of investment.

Further steps include a new long-term ‘Road Investment Strategy’ that involves investment of over £15 billion into motorways and major trunk roads between 2015 and 2021. 127 schemes are being progressed; 50 of these schemes are directly supporting housing and economic development sites, whilst others are improving access to ports and airports. Finally, there are ring-fenced funding allocations for projects that help tackle the environmental consequences of road use.

Railways:

There is a continued need for railways to adapt and change in order to cope with growth so that they can provide a reliable and trustworthy service to customers. The Government continues to support the Office for Rail and Road’s plans to regulate each of Network Rail’s routes individually from 2019.

Looking forward, the Government will continue to support, when appropriate, alliances between the train operator and infrastructure manager. The Government believes this will allow more effective planning of engineering works and a faster response time to incidents. Overall, the expectation is that train companies and Network Rail should continue to find ways to work together to improve customer experience. The Government will also look to find new ways to introduce contestability and innovation into rail. It views the establishment of East West Rail, the new organisation charged with reopening the rail link between Oxford and Cambridge, as a test-bed for this.

Housing:

The Strategy document emphasises the key role transport investment plays in unlocking housing development. Successful joined-up planning for housing and infrastructure will support the creation of new housing and complement broader public policy objectives. The potential for new transport projects to generate housing growth will be built into the Government’s appraisal of future projects.

The role of technology:

Through investment, the Government aims to position the UK as a global leader in transport technology.

Research, innovation and technology are therefore central to the Industrial Strategy. Innovative technology will be used to: improve the Government’s ability to monitor its investments; make journeys smoother for the public by keeping travellers informed and more effectively managing demand; deliver more sustainable and eco-friendly transport; and make transport safer and more secure.

Examples of key technologies that have been invested in to date include:

  • £80million initial funding for Smart Ticketing in the North of England;
  • £90million investment in charge point infrastructure to respond to the increased uptake in Ultra Low Emission Vehicles and the Government intends to set out its long term strategy for promoting the transition to zero emission roads by March 2018;
  • Over 4 years, £246million was committed from the Industrial Strategy Challenge Fund to help UK businesses invest in developing batteries for the electrification of vehicles;
  • £200million has already been committed to accelerate the research, development and deployment of technologies for connected and autonomous vehicles;
  • Trial and deployment of smart motorways and digital signalling on rail to help us better understand, join up and manage our transport systems; and
  • Improving the quality, resilience and sustainability of transport infrastructure through advanced materials and condition monitoring.

Funding:

As future investment plans are developed, the Government accepts the need to extend financial reach by exploring alternative sources of funding and identifying strategies to make spending more efficient.

Alternative sources of funding could include:

  • direct contributions from the private sector;
  • use of developer contributions and business rate supplements;
  • hypothecation of existing income streams, e.g. via local business rates; or
  • other public sector funds such as the Local Growth Fund, the DCLG Housing Infrastructure Fund, and funding from local authorities.

The Strategy document also re-emphasises support for the use of private finance models where they are consistent with general policy objectives and provide the best value for money.

An Infrastructure Efficiency Strategy is also being developed with Crossrail, Highways England, HS2 Ltd, Network Rail and Transport for London. This will focus on ways to drive efficiencies and provide greater transparency on the whole life costs of investments.