Environmental Engineering Reference
In-Depth Information
22.7 Funding approval for major transport schemes
The procedures set by DfT for determining funding approval of major schemes are
extremely detailed and protracted. This section describes the process as it applies
to highway, public transport or maintenance schemes promoted by local authorities
which are to be funded as part of the Regional Funding Allocation. Light rail schemes
and schemes forming part of a package to be supported by the Transport Innovation
Fund (TIF) are the subject of additional guidance. The criteria for schemes applying to
the Community Infrastructure Fund (administered by DCLG) are explained in section
23.8.
An accurate estimate of the public costs of schemes is critical to determining their
value for money and to the effective management of RFA programmes. However
this information will only become known as a scheme is worked up in progressively
greater detail - a process that may take several years. Even if the basic character
of a scheme does not change during this period the eventual cost will depend on
a greater understanding of the engineering implications, on changes in the level
of construction costs and on the particular procurement arrangements secured.
Additional uncertainties surround the degree of risk-sharing in any private finance
deal, and on the scale of funding contributions from private developers and any
public sources other than the RFA budget itself. The significance of these issues has
led the DfT to revise the procedure it follows in considering funding approval (DfT
2007c).
The case for an authority's scheme still has to be made in the context of its Local
Transport Plan, but procedurally it is now considered separately. A pre-requisite is
that it must have been identified as a priority by the relevant region through the RFA
process. This has eased the previous situation where individual authorities would 'wait
in the wings' for years if not decades, hopeful that their pet scheme would eventually
win approval on the 'Buggin's turn' principle. Nevertheless the twists and turns
that are forever being made in national and regional policy, technical guidance and
prioritisation procedures continue to give hope to many of the 'also-rans'.
To be eligible for major scheme funding the total cost of a scheme (including
preparatory costs after Programme Entry) must normally be at least £5m. However
for smaller authorities in non-metropolitan areas, schemes will be considered where
their cost is
a
at least 75% of the authority's average projected annual indicative allocation
for the LTP2 periods (for the integrated transport or maintenance block as
appropriate) AND
b
more than 50% of the combined annual indicative allocation.
An initial bid for funding has to be supported by a Major Scheme Business Case
which demonstrates the case for the scheme under five heads (Box 22.5). The timing
of this work should reflect the period of funding which has been identified for the
scheme in the RFA:
Authorities should also work within the funding envelope assumed in the RFA
advice. If the promoter considers that the costs of the required DfT contribution will
exceed [this] then further advice should be sought from the region before working
up the bid for submission to the Department. The region may wish to consider
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