The approval of plans and projects - Transport Policy and Planning in Great Britain - page 378

conditions concerning the cost of the scheme (or the Department's contribution), the
allocation of risks and a time limit on the application for Full Approval.
Full Approval is given once procurement has taken place and a preferred bidder
and final price obtained. This then enables the promoter to commence construction
and access grant funds.
Except for schemes procured through PFI (which are negotiated individually) local
authorities are expected to contribute at least 10% of a scheme's cost, including 50%
of eligible preparatory costs. In the case of light rail schemes however a minimum 25%
local contribution is required. The Department maintains that this higher figure 'has
not proved a barrier to the development of projects' and will continue. The 10% figure
may be relaxed for smaller authorities (where it represents more than the equivalent
of 100% of their Integrated Block allocation). Conversely a greater local contribution
would be expected where the case for a scheme was made strongly in terms of 'aims
other than transport' (e.g. regeneration or economic development).
The scheme cost referred to relates to the Quantified Cost Estimate at Programme
Entry stage. The Department will also normally be prepared to pay 50% of any
additional costs arising subsequently that fall within the sum originally included as
optimism bias. The maximum Departmental contribution, identified at Programme

Any expenditure above
Approved Scheme Cost

100 per cent

50 per cent

Additional Risk Layer

Approved Scheme
Cost
(QCE + Additional
Risk Layer)

Quantified Cost
Estimate (QCE)
including prep
costs and QRA

Expected Departmental Contribution

Minimum local contribution
for QCE expenditure

Minimum contribution for
risk layer expenditure

Expected local contribution for any expenditure
above the Approved Scheme Cost

Expected Departmental Contribution = The sum represented by the larger of the white boxes
Maximum Departmental Contribution = The sum represented by the total of the two white boxes

Figure 22.1 DfT contribution to local authority major scheme costs (source: DfT 2007c)