9 September 2011 is a date looming large for the promoters of 45 local authority major transport schemes, many of which are road schemes. This is the date by which they must submit ‘best and final’ bids to the Department for Transport (DfT) for funding. The DfT’s funding decision will then be issued December 2011.
The 45 schemes make up the DfT’s ‘development pool’. Following the Comprehensive Spending Review in October 2010, the ‘development pool’ was established to categorise schemes which the Government was prepared to consider for funding in the period 2011-2015, subject to improved funding bids. In February, the development pool was expanded to the current 45 schemes, when 23 ‘pre-qualification pool’ schemes were added. The 45 schemes, and their initial ‘expressions of interest’, can be viewed and downloaded at: http://www.dft.gov.uk/pgr/regional/ ltp/major/transportschemesupdate/.
As at February 2011 the total likely funding request from the development pool schemes was around £950m, with an available funding pot of £630m. The DfT’s guidance states that ‘the process remains competitive’ and that they ‘do not expect that all these schemes will be funded’. Scheme bids will be judged on:
- value for money;
- the proportion of overall funding coming from non-DfT sources;
- strategic importance; and
- a consideration of modal and regional
balance across the programme. Thus the difficult task currently facing the 45 development pool schemes is to revise their business cases to come up with a best and final offer that not only meets the above criteria but does so in a way that prioritises their scheme above competing bids. Savings will need to be identified so as to maximise value for money, but without compromising deliverability. Changes to schemes may require re-consultation with key stakeholders and the public. Identifying non-DfT sources of funding will be a challenge for cash-strapped local authorities, who will either have to make some difficult spending decisions, or alternatively look at introducing new mechanisms for generating local funding.
The criterion concerning regional and modal balance presents a further interesting dimension, given that to a great extent it is outside of the control of the promoter.
A quick ‘armchair analysis’ of the 45 development pool schemes suggests that at least 50% of the projects are highway schemes, or mixed schemes involving significant highway improvements. The government may not wish to be seen to be favouring highways investment above public transport schemes, so this immediately raises a question mark over the prospect of all of these road schemes receiving DfT funding.
Further, there is some regional imbalance among the 45 development pool schemes – some 25% are located in the North East (including Yorkshire) alone, whereas East Anglia, the South and South East combined account for 25% of the schemes. The ‘strategic importance’ criterion may well favour investment in less economically favoured and more populous regions, but equally it is likely that schemes that are clustered together may find the process particularly competitive.
Developing a winning best and final offer will be no mean feat, requiring reconsideration of all aspects of schemes, and an innovative approach. It seems inevitable that some schemes – and in all likelihood a number of proposed new road schemes – will be disappointed come December 2011.