Environmental Engineering Reference
In-Depth Information
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Strategic roads
Rail
Local Transport
London
Unallocated
Figure 12.2
Public and private investment 1991-2001 and planned 2001-2011 (source DfT Transport
2010)
• Local Transport benefited disproportionately, increasing steeply to about 150% of
former levels by 2004/05.
• Rail benefited from an even greater increase in investment (including in rolling
stock) - up 200% in the five years to 2003/04. (The extent of decline shown
for Rail after this time is misleading since it was likely to receive the bulk of the
expenditure unallocated thus far.)
In practice the aftermath of the Hatfield rail crash and Railtrack's liquidation
meant that plans for the rail component of the investment programme had to be
completely revised. The combined effect of much-inflated costs and a greater need to
invest in infrastructure maintenance and renewal meant that previously anticipated
enhancements were squeezed out. Even so by 2004/05 it had become necessary to
increase the public investment component (i.e. additional to that made by Railtrack's
successor, Network Rail) by some £600m a year more than planned.
In the 2004 Comprehensive Spending Review the original plan for public spending
on transport was maintained (i.e. at a roughly constant level in real terms beyond
2004/05) and extended to 2014/15. However an additional £1.7bn was allocated for
the three years 2005/06-2007/08 to cope with 'immediate pressures' (i.e. in the rail
industry) - an example of an enforced change in spending plans. To these were added
an extra £500m a year cumulatively beginning in 2006/07. This represents a genuine
policy shift since overall expenditure is now expected to increase broadly in line with
growth in the economy (i.e. around 2.5% a year in real terms) and not simply to offset
inflation.
Significantly however this growth increment was not added to existing funding
blocks but kept separate in the form of a 'Transport Innovation Fund' (TIF)
administered centrally by DfT. This is designed to promote road user charging schemes
and investments which contribute to national productivity. Further details of TIF and
its application are given in section 23.4.
In the next section we go on to describe techniques of cost-benefit analysis which
are used to assist in investment allocation decisions.
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